startup

10T Holdings: A large number of crypto startups scare off venture capital firms with valuations of 50 to 80 times

ChainCatcher news, according to Cointelegraph, 10T Holdings CEO Dan Tapiero stated at the Consensus conference that there is a widespread issue of overvaluation among current cryptocurrency startups, with many companies seeking funding at valuations 50-80 times their revenue, far exceeding reasonable limits. The firm has thus rejected over 200 projects, including well-known companies like the bankrupt FTX, BlockFi, and Celsius. Tapiero indicated that they prefer to invest in projects with valuations between $400 million and $500 million, with a valuation-to-revenue ratio not exceeding 10 times.Market data shows that despite concerns about valuation bubbles, the total amount of venture capital transactions in the cryptocurrency sector reached $6 billion in the first quarter of 2025, a more than 100% increase quarter-over-quarter. Pantera Capital CEO Dan Morehead shared his investment strategy at the conference, noting that 86% of their investment projects have achieved positive returns, with 22 becoming unicorn companies. Morehead suggested adopting a diversified strategy of equity and token combination investments to mitigate market volatility risks.Industry analysts pointed out that the current cryptocurrency financing market shows a clear trend of differentiation: on one hand, overvalued projects face difficulties in securing funding, while on the other hand, high-quality projects continue to attract capital. This pattern reflects investors' increasingly rational judgments regarding project quality and valuation.

Viewpoint: Some market makers profit from token lending, trapping crypto startups in a death spiral

ChainCatcher news, according to Cointelegraph, suitable market makers can act as boosters for crypto projects, helping them to launch on mainstream trading platforms, providing liquidity, and ensuring that tokens are tradable. In the field of market making, a popular yet often misunderstood model is called the "loan option model." In this model, the project lends tokens to market makers, who then use these tokens to provide liquidity, stabilize prices, and assist the project in launching on crypto trading platforms. However, in reality, this model has become a "death sentence" for many new projects.Behind the scenes, some market makers are profiting from this token loan structure, which is often packaged as "low risk, high return," but in reality can severely impact token prices, leaving nascent crypto teams in chaos and struggle. Ariel Givner, founder of Givner Law, stated, "The way it works is: market makers borrow tokens from the project at an agreed price, in exchange for their promise to help these tokens launch on major trading platforms. If they fail to fulfill this promise, they must repay the tokens at a higher price within a year."However, what often happens in reality is that market makers sell the borrowed tokens, triggering an initial price crash. After the token price has been driven down, they then buy back the tokens at a lower price, profiting from the difference.
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