While attending the Collision conference in Toronto, seasoned cryptocurrency expert Yat Siu offered insights into how crypto firms can adapt to diverse landscapes, emphasizing that the situation isn’t “as dismal as it appears.”
According to Yat Siu, CEO of Animoca Brands, the global crypto sphere presents an uneven picture. Web3 startups are prospering in the Middle East and Asia, but their counterparts in North America are grappling with formidable macroeconomic and regulatory challenges.
In his interaction with Cointelegraph during the Toronto conference, Siu underscored the notable contrasts in the crypto business environment globally, emphasizing that things aren’t “as dismal as they appear.”
He pointed out that despite current challenges such as global high-interest rates and a slump in crypto asset prices, Web3 startups still manage to secure funding from venture capital firms. However, these conditions have elevated entry barriers for new entrants.
“Although valuations have obviously dipped, the influx of builders into the space, the deployment of smart contracts, and the number of individuals involved are all on the rise. Overall, we are very optimistic,” he mentioned. Siu also disclosed that Animoca added nearly 60 investments to its portfolio in recent months.
However, despite this activity, the crypto space is not as robust as it once was. The Q1 2023 PitchBook Crypto Report revealed that crypto firms raised $2.6 billion across 353 investment rounds. Deal values experienced a quarterly dip of 11%, and total deal value decreased by 12.2%.
These observations from Siu come in the wake of major events impacting the crypto space, including FTX’s substantial collapse in November 2022. For example, in the United States, the Securities and Exchange Commission has initiated stringent actions against crypto firms to regulate the industry.
In contrast, places like Hong Kong have adopted a licensing system for crypto businesses to mitigate the risks linked to digital asset markets. The United Kingdom has followed suit, sanctioning legislation that allows regulators to introduce and enforce regulations for crypto businesses.
Viewing crypto venture capital from a North American lens might paint a grim picture, but the situation is much brighter in regions like the Middle East and Asia, observes Siu. He believes that regulatory pressures have been a significant stumbling block for Web3 companies, fostering uncertainty and fear among stakeholders.
Siu sees a strategic intent behind the varying approaches nations adopt towards the industry. He perceives the promotion of Web3 as a national interest narrative that goes beyond end-user self-sovereign identity interests. According to Siu, while the U.S.’s strict stance has unintentionally benefitted other regions, it’s unfortunate since the U.S. plays a crucial role in the crypto space.
He further adds, “The silver lining is that this has opened up opportunities for ecosystems that previously had no chance to thrive.”