Crypto downturn reveals gap between VC valuations and market cap

The recent crypto market downturn has highlighted a substantial discrepancy between the high valuations assigned to blockchain startups by venture capitalists (VCs) during the last bull cycle and their current public market capitalizations. Data compiled by CryptoRank's tracker, Fundraising Digest, shows several projects experiencing steep resets. For example, Humanity Protocol, valued at $1 billion by VCs, now has a market cap of about $285 million, while Fuel Network dropped from a $1 billion valuation to around $11 million. Fundraising Digest attributes this to VCs overpricing projects during periods of hype, leading to a market correction when sentiment fades. Other examples include Plasma falling from a $500 million VC valuation to $224 million, and Camp Network dropping from $400 million to $15 million. This situation underscores the need for investors to maintain a level head and assess risk across various outcomes. Furthermore, overall crypto VC funding remained weak in November, despite large rounds for major players like Revolut and Kraken masking a broader slowdown in early- and mid-stage investment.

(Source：Cointelegraph)