Digital funds are seeing renewed inflows, with millions of dollars in the last two weeks despite the conflict between Russia and Ukraine.
The Russo-Ukrainian war led the global market into a state of correction and extreme volatility, and we have also seen a multiplier effect in the cryptocurrency market.
Cryptocurrency Investments Amid Russo-Ukrainian War
The latest report shows that global investors are buying stakes in crypto funds and companies, with many of these investors believing that the sector has the ability to withstand geopolitical uncertainty.
“Venture capital buyers invested around $4 billion in digital funds during the last three weeks of February,” blockchain research firm Fundstrat said in its latest report.
Additionally, venture capitalists also poured $400 million into digital startups during the last three weeks of February. Fundstrat data also shows that venture capital investments remain consistent with ample weekly inflows.
Also, the recently launched digital backgrounds have managed to attract a lot of interest. These funds have raised more than $3 billion in the last two weeks.
Paul Hsu, Founder and CEO of Decasonic, said: “The conflict in Ukraine has weaponized our financial and digital economy and has truly accelerated the adoption of blockchain. We are seeing a reallocation of cryptocurrencies and blockchain away from real estate and bond funds, for example, due to higher interest rates. I have seen this in my money, but unfortunately due to the closure, I cannot accept any more money or investors.”
He added that there is a demand to allocate $200 million to his fund, which is a hybrid fund that invests in digital currencies and venture capital.
Investors pull out of bonds and real estate
The data shows that investors have taken money out of bonds and real estate in massive amounts, and according to Refinitiv Lipper data, US investors took a net $7.8 billion out of bonds on March 9. During the same period, real estate funds recorded net outflows of $707 million.
George Milka, CEO of digital brokerage SFOX, explained: “Crypto-based companies still have very high valuations and many funding rounds are still oversubscribed. In fact, the crypto startup ratings are probably the highest I’ve ever seen.”
Private equity firm Bain Capital Ventures said it will also launch a $560 million fund focused entirely on crypto-related investments.
In the same vein, after hitting a new low on February 24, the bitcoin and cryptocurrency market has risen 10% since then. Of course, there has been strong volatility in recent weeks.
Furthermore, some analysts believe that the fears of the Russo-Ukrainian war are now fading, as Joe DiPasquale, CEO of BitBull Capital says: “There really is no panic even with the conflict in Ukraine. People started with the boxes, encouraged by the price increases of the last two years”.