The chart below shows the investments of the top venture capital funds in 2022. They invested a total of $7.2 bln. Of these, 62% were invested in blockchain game tokens (play-to-earn).
At the moment, most of these tokens are extremely illiquid, and the money to buy them is usually taken on credit. Naturally, in the case of a fund’s problems, a lot of tokens from its portfolio will fall on the market. It all ends in a price collapse.
The fall of Alameda highlighted this structural problem. But Alameda may not be the last top venture capital fund to go bankrupt. None of them give proper accounts of their activities, so we can’t know the real state of affairs.
The collapse of venture capital funds is the biggest risk for crypto. However, it’s alts that are most threatened, not #BTC and #ETH.