It was a rough rough week for crypto investors, but things are looking up today. Bitcoin prices have bounced back above the 30 thousand dollar level by noon. Eastern other cryptocurrencies are rising as well. Ether was worth about 2, 100 and cardano among the best performers it jumped about 18, since yesterday, todays rally provided much needed. Relief for a market that spent most of this week in free fall. Bitcoin is down 15 in the past seven days for ether its more like 20 and this isnt. The first time cryptocurrencies have crashed. Take a look at this chart showing bitcoins price since its start, its filled with some very strong highs and some very deep lows. Volatility is just a part of crypto that hasnt changed. What is different this time, the amount of people with skin in the game chanalysis found an 880 increase in crypto adoption last year, right as bitcoin was reaching new highs. According to coin shares, institutional investors poured 9.3 billion dollars into crypto funds last year. All those new holders are now paying close attention to the price of bitcoin and others theyre also paying attention to the fallout from the terra, usd stablecoin heres the latest. On that story. We told you yesterday that validators halted the terra blockchain, as the luna token fell to near zero. It restarted soon after that then late last night. They did it again. The blockchain halted for a second time, as the luna token dropped to eight tenths of a cent.

Nine hours later, the network spun up once more terraform labs said the halt was necessary to quote reconstitute the network. As of noon. Eastern lunas price sat at a 7 000th of a cent next sam bankman freed just made a major investment in robin hood. The ceo of ftx bought a 7.6 stake in the company saying in an sec filing that he saw it as an attractive investment, but that he didnt have any intentions of influencing control of the company robin hoods stock, surged more than 20 on that news. Finally, elon musk has paused his twitter takeover. The tesla ceo announced on twitter that the deal was on hold until he learned how many fake accounts are on that platform. He followed up in a tweet by saying that hes still committed to the deal if he were to back out hed, be required to pay a 1 billion fee. Elon musk previously said that verifying twitter users and cutting down on spam is high on his list of priorities, and some have speculated web 3 technologies or crypto could be a way to do just that. Okay, as crypto markets have fallen in recent weeks, venture capital firms have changed their investment strategies for our main story. I spoke to michael groninger, hes ceo of chain analysis about that companys own funding round and how venture capitalists are now focusing on more quality investments. Lets start with the news of the day, so big funding round for chain analysis talk about that.

What youre announcing today and the new valuation yeah. So we uh we raised 570 million dollars. Uh, post valuation, after that is, is 8.6 billion dollars, uh its uh, its led by tic whos, the sovereign wealth fund out of singapore and the the proceeds of of that like funding round, and the reason to raise money right now is is mainly like international expansion. But also growing our products, as we see more and more use cases for our data and talk about the product that chain analysis offers. You guys are able to look at some of the activity on different block chains. Walk us through what chain analysis does here yeah. So when i looked at at the ive, been in the crypto space for 10 11 years or so, and when i looked at blockchain in the early days, i really saw that this is a piece of finance that probably have a promise to be the most transparent Financial system that humanity ever built and then you look at that and you look at transactions on a blockchain and theyre super complicated. So could i somehow make that more accessible for people? That was the real question, its analysis, products and data strive towards that. Our data is around looking uh being able to understand like who are the different services, who are the players in a blockchain? What is happening in crypto in general and then build products around that? Where you can run investigations follow the money you can do business intelligence.

You can do compliance and monitor all transactions on your platform that way got it, and that is a unique thing about cryptocurrencies and weve. Seen our reporting as well, you can follow certain big transactions. What are some of the examples of the trends that youre seeing? I know youve done some research around sanctions and the the possibility for evading sanctions, illicit finance. What have you seen and what some of the data that stands out from the past couple of years? So i would say one of the the major overlying trend is that uh criminal abuse of crypto is is going down at least in a in a relative way. So last year, crypto grew like around 5x in terms of usage and at the same time we only saw uh at moderate growth in in criminal activity around 80, or so so. It means that its not its not seen as the place where you can launder funds. So, like clearly see a decline there right now. Our assessment is that around one 0.15 percent of transactions could be related to money laundering or other kinds of crime, which is a very low number and down from one percent the year before and further up in. In the in the past, there thats a big trend. I would say what we see as well is we also monitor flow of funds in general and try to monitor what is happening in the industry today, and some of the things we typically see is like what are the sell offs that happens in crypto? Is it retail investors that that needs liquidity because they are afraid of of the the current conditions in the world or is it like big whales that say like crypto is im done with that? So they are exiting big portions and we can monitor that as well.

On the blockchain and understand what is the current trends in the in the market um? I do want to pivot to the funding environment. Um weve seen whats happened in public markets with cryptocurrencies and equities. Was it difficult to go out in this environment and raise cash, and what are you seeing on the private side of things as you talk to some of your venture backers? So i think if you go back last year last year, every company was a good company and everyone could raise money and there was like not really a lot of scrutiny in terms of investments, so everyone could basically raise funds. If you look at what happens in in a market like it is right now, then investors stop and say what happened last year. Who did we back? What did we do and then they look for the companies that they can see like a true long term value and like where there are unique companies in that sense, and i would say yes, of course, when we talk to investors right now, the scrutiny is harder. We see more due diligence being done, the numbers are being turned many times, but also the conclusion where, in the end, that analysis is like one of the unique companies that they definitely wanted to support, so it was possible. I also have to be honest and say like of course it was last year. You could raise money over at dinner and then it was done and you got a term sheet after that and its more of a process this year got it so not as easy as it has been to raise vc money.

I would say yes its not as easy as it has been for sure got it got it and as far as what youre seeing work so chain analysis is a pretty unique business here. Um. Is there a flight to sort of the the infrastructure place here, or what have you seen as far as whats, getting that quality investment and what some of the bigger investors are are drawn to right now in this market? So i think what what is unique about analysis today is that were the biggest enterprise sas company in the crypto space were all about recurring revenue, so standard sas model with recurring revenue and so on its a very well understood business model. Its very well understood how its going to be valued on a long term basis, and so on. So its very, very like comforting as an investor, to enter a business like that, and that should be seen as opposed to a lot of of crypto. Where you see a very interesting new business model being played out, but the risk appetite – and i would say the the adventurism among investors – is clearly something thats that like passes by once the market goes off risk. I want to ask you about one cryptocurrency in particular: weve talked a lot about terra usd um and luna and that whole ecosystem anything youre, seeing from chanalysis um. That is informative of kind of how this happened or some of the trends behind that.

So its clearly one of the one of the things thats thats important to mention here is that theres two kind of staple coins, one of them – are algorithmic and another one is backed by actile dollars and one is backed by actual dollars like usdc or us. Usdt theyre, backed by physical dollars, somewhere, probably in thresholds or held on a bank account they are stable. For that reason, and and thats thats uh thats a strong, a very strong, i would say currency to use online. If you look at algorithmic staple coins uh, they are different in many ways and the difference there is that theyre, basically backed by a structure where you offer an interest rate and that encourages people to put money into it and that can uh maintain a price at Some point: if theres a run against against a algorithmic stablecoin, there will be a point where it runs out of funds theyre not there. They need to like mimic that with other currencies. We saw that experiment play out last week. Uh we see we saw that that the money basically was uh yeah in the end end up being gone and they couldnt withstand the pressure. Its something an attack against the the against luna was was happening. That was clear. Someone probably planned it out and did this on purpose uh also for for the benefit of that and its something that we, of course, looking into and trying to figure out what actually went on here.

All of the all of the data is stored forever, so its something that theres time to look into and understand who was behind. Was there anything illegal going on? Maybe not, and is it something that we want to to protect that protect against going forward? Okay, thats all for this week, but head over to cnbc.

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