Bargains
We saw how the valuations of many fintech firms had an aggressive seesaw during the past year as low interest rates attracted plenty of capital at absurd prices. Now, that has flipped as higher interest rates are demanding higher discount rates which are severely impacting valuations. Now that growth is also being impacted by a Central Bank imposed economic slowdown, this have gotten cheaper but also dangerous. Who wants to invest in something that can collapse the next day? FTX tried to be the savior of a couple and likely brought too much attention and paid for it, it seems.
The unfortunate truth is that this sort of consolidation is likely needed to keep the interest of traditional markets in the asset class that is Crypto. If not, it will take much longer to increase adoption and growth as trust will be a large barrier to surpass. However, the fact that DeFi cannot be bought, it will likely be the next target for failure. It will be interesting to see how it plays out as they have been resistant to most impacts other than exploits and weak volumes. They could be the last one standing in the end...
I am very interesting to see if anyone really pulls the trigger on this type of acquisition as it will definitely solidify the asset class for the long term. However, it may also come at a price of continued centralization which we have seen is still not to be trusted. Technology is solid but people and institutions are not no matter what regulations are put in place. In the meantime, I think many projects continue to build and survive the Crypto Winter to come out stronger on the other side. HODL!
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