- Morgan Stanley has recently expressed analysis, facts, and predictions about Venture Capital investments.
- Deal activity witnessed a new high in December last year, and it might plunge nearly 50% by the end of the year.
- It also highlighted how investment interest shifted from crypto to DeFi to gaming and Non-Fungible Tokens (NFTs).
What does Morgan Stanley think About Venture Capital Investments?
In a recent report, Morgan Stanley (MS) highlighted that crypto companies secured a record $30 billion of Venture Capital in the year 2021. And the number of deals in the sector stays surged in spite of the fact that the crypto market has witnessed a massive fall lately.
The report further highlighted that though the deal activity might drop due to mirroring trends in other VC categories.
Morgan Stanley signified that the number of VC cryptocurrency investments reached a height in December. And if the crypto sphere matches other sectors, the level might slip nearly 50% by the year’s end.
It further added that a downtrend is anticipated as the activity across eight of the most prominent bellwether markets in the last 12 months has reset 50% from the peak, reducing the good performance of some largest technology and crypto investors who are prioritizing current holdings over deploying further dry powder.
And that the exit of tourist capital as token and equity investments both become more challenging during a digital assets bear market, which was a similar pattern witnessed during 2018 and 19.
Morgan Stanley also signifies that early 2020 witnessed most investments in crypto infrastructure and financial services. And in late 2020 to around Q1 2021, decentralized finance (DeFi) applications were the sector where the investment was inclined to. And then, by 2021 end and 2022, the inclination shifted toward Non-Fungible Tokens (NFTs) and the gaming sector.
Venture Capital is basically a form of private equity investing where the financing is provided to those small businesses and startup companies with high future growth potential. It is to look forward to if Morgan Stanley’s predictions prove to be true.
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Source: https://www.thecoinrepublic.com/2022/06/02/morgan-stanley-expects-a-downtrend-in-record-crypto-venture-capital-investment/