Blockchain.com value could shrink by $10 billion

Crypto trading platform Blockchain.com is considering a “down round” of funding that could cut the company’s value from the $14 billion it reached this year.

That’s according to a report Sunday (October 30) by Bloomberg News, citing sources familiar with the matter.

Although the potential round is still in discussion, the funding is likely to shrink Blockchain.com’s valuation to between $3 billion and $4 billion, one of the sources said. Blockchain.com was not immediately available for comment Sunday.

The company has struggled – like many of its competitors – since crypto prices began to fall earlier this year. Blockchain.com announced it would lay off 150 people – a quarter of its staff – in July.

These layoffs came in the wake of the company’s $270 million loss to Three Arrows Capital, a crypto hedge fund that had an estimated $10 billion in assets and made several extremely risky investments in decentralized finance projects such as the Terra/LUNA algorithmic stablecoin.

The funding comes at a time when venture capital investment in crypto is falling as startups struggle due to this year’s big digital currency selloff. As PYMNTS noted earlier this month, worldwide VC investment for the quarter was $4.44 billion, down 37% from the same period last year.

The pullback also comes as there has been a general decline in investing in tech companies, although crypto investing has seen a sharper drop due to higher risk.

Still, the rocky crypto market hasn’t been enough to convince people not to invest in digital currencies, according to a survey released last week by Fidelity Investments.

The company’s findings showed that 58% of institutional investors invested in digital assets in the first half of 2022, up six points from 2021, while nearly three-quarters of investors said they plan to invest in the future.

“While markets have faced headwinds in recent months, we believe digital asset fundamentals remain strong and the institutionalization of the market over the past few years has positioned it to weather recent events,” Fidelity Digital Assets president Tom Jessop said in news. release. “Institutional investors are experienced at managing through cycles, and the largely inherent factors they cited as appealing in this study are likely to remain as the market emerges from this period.”