Premium

The cryptocurrency meltdown is hurting family offices

Luna, one of top-performing cryptocurrencies of 2021, has lost 99% of its value in a single day.

Its market value has fallen to $327 million according to CoinGecko, against $35 billion last year.  Its rout follows a collapse in the algorithmic peg enabling its sister stablecoin, TerraUSD, to track the US dollar.

Why the peg was knocked away is not clear, but Terra wants to raise $1.5 billion for fresh collateral.

Events at Terra are bad news for family offices that became crypto supporters following gains of 20,000% for early investors promoting new digital currencies from a standing start in 2021. Family Capital pointed out the digital craze resembled the late 1990s dot-com craze on 30 December.

Bitcoin, once seen as a store of value in an inflationary world, has fallen 10.8% in a day and 29.3% in a week.  Its rival, Ethereum, is down 20.2% in a day and 35% in a week. 

It is too early to write off crypto. The blockchain trading system which lies behind them has real value as a way to carry out money transfers without using expensive third parties. 

VC funds taking advantage of blockchain innovation continue to run at high levels. BVNK, a payments platform, has just raised $40 million through funding led by Tiger Global.

But the complex mechanisms which lie behind crypto are vulnerable to collapse when liquidity is withdrawn from the market, as opposed to the way they were boosted when the money was flowing.

Subscribe

You will need a Premium Plus Subscription to access this database.

Exclusive news, analysis and research on global family enterprise and private investment offices.

Access to the most comprehensive fully interactive database on global family offices, principal investment offices, and family enterprises.

Check Deal Data, Senior Staff, and New Analysis on more than 1000 family/principal investment and holding groups

Already have an account? Login

Subscribe

You need at least a Premium Subscription to read this article.

The most comprehensive information service on the global family enterprise world, featuring exclusive news, analysis, research and data on global family enterprises, family offices, and private investment offices.

Premium

£299

per year

  • Exclusive reports, analysis and commentary
  • Exclusive access to family/private investment office deal information
  • Exclusive interviews with principals and senior management of family/investment offices
SUBSCRIBE NOW

Premium+

£399

per year

  • Access to All of Premium
  • Access to all of FamilyCapital Analytics, our interactive database with more than 1000 detailed profiles of family investment groups

More Info

SUBSCRIBE NOW

Already have an account? Login

You've reached the end.

Continue reading free articles by registering as a Member.
Or choose a Premium Plan.

Membership

Free

  • Exclusive reports, analysis and commentary
REGISTER NOW

Premium

£299

per year

  • Exclusive reports, analysis and commentary
  • Exclusive access to family/private investment office deal information
  • Exclusive interviews with principals and senior management of family/investment offices
SUBSCRIBE NOW

Premium+

£399

per year

  • Access to All of Premium
  • Access to all of FamilyCapital Analytics, our interactive database with more than 500 detailed profiles of family investment groups

More Info

SUBSCRIBE NOW

Already have an account? Login

Leave a Reply