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The first half of 2024 has marked a period of significant growth and innovation in the cryptocurrency market. This report outlines HTX Ventures' key investment directions and maps out the investment outlook for the latter half of 2024.
"HTX Ventures had a great first-half of 2024, following our objective of advancing blockchain technology and Web3 ecosystems, it was through active searching and curation that we found potential opportunities to invest in. These projects have been shortlisted as we believe that they offer innovations and infrastructure that will be essential to the development of Web3. "Edward, the Managing Partner at HTX Ventures said. "For the rest of 2024, we remain optimistic despite the market slowdown, and will continue our lookout for more great projects to invest in by staying committed to the long-term game and supporting front-end development. We have observed a positive innovation flywheel. Triggered by one successful business model and ecosystem, it will inspire many entrepreneurs and lead to long-term innovations within the ecosystem."
Market Context
Macro Market
The cryptocurrency market has experienced significant growth during the first half of 2024. The approval of Bitcoin ETFs has opened the door to traditional finance for cryptocurrencies, injecting substantial liquidity and stabilizing Bitcoin prices between $60,000 and $70,000 from an average of $40,000. Additionally, the approval of ETH ETFs by the U.S. Securities and Exchange Commission has ushered cryptocurrencies into the ETF era, greatly lowering the investment threshold, though it may also bring more regulation and artificial volatility. As a major class of risky assets, cryptocurrency ETF price fluctuations will have a stronger positive correlation with other financial markets (such as stocks and bonds). It could cause crypto to be more easily manipulated by Wall Street.
The Federal Reserve's interest rate policies also have a significant impact on the cryptocurrency market. The Federal Reserve's interest rates directly affect the liquidity of the U.S. dollar and related pegged currencies, which in turn directly influence the volatility of Bitcoin and other major cryptocurrencies.
Comment on the August 5th Global Market Selloff
Triggered by Japan's interest rate hike, poor U.S. corporate earnings, and unfavorable U.S. unemployment data, the market experienced excessive pessimism and a global selloff (exiting risk assets and moving into safe-haven assets) on August 5th. However, the U.S. economy has not actually entered a recession. More economic data, such as July and August's CPI and PCE data, ISM manufacturing and non-manufacturing indexes, and PMI data, is needed to clarify the economic situation. Currently, the market's rate cut expectation is overly optimistic, with the market pricing in a total rate cut of about 100 basis points before the end of the year. The Federal Reserve needs more evidence to make a drastic monetary policy decision. Additionally, market uncertainty has increased due to the U.S. election.
Based on the above assessments, we believe that at least until September, crypto investors should not be overly pessimistic and blindly cut positions, nor should they chase highs. It is a good time to tap into cheap but high-quality business models. Position sizes should be moderate, leverage should be avoided, and investors should continuously update their understanding as new economic data is released to gain greater certainty.
Project Building
On the business side, the Ethereum Dencun upgrade in early 2024 enhanced the ETH ecosystem, improved Layer 2 usability and competitiveness, and opened up new opportunities for project chains. EigenLayer's innovative business model has introduced new use cases and revenue streams for secured network coins like Ethereum, prompting exploration of new applications for Bitcoin. The combination of AI Agents with blockchain is also bringing transparency and automatic execution for service requesters, providing a glimpse into the future of AI integration.
HTX Ventures' Investment Focus in First Half of 2024:
During this market cycle, HTX Ventures has been actively identifying and supporting innovative technologies and new business models. Committed to advancing blockchain technology, HTX Ventures offers comprehensive support to projects that expand the scope of Web3.
In the first half of 2024, HTX Ventures made 23 strategic investments across a wide range of areas, including infrastructure, DeFi, the Bitcoin ecosystem, AI, DePIN, SocialFi, and more, with a strong focus on foundational infrastructure and base layer models. Impressed by the increasing talent in the Web3 builder community, particularly as experienced Web3 developers collaborate with Web2 professionals to address real user needs, HTX Ventures is excited to partner with passionate teams to build a more user-friendly Web3 ecosystem.
There are six main tracks that we look into and believe will continue to be rewarding and flourishing during the latter half of 2024. These include BTCFi, Multichain Future Infrastructure, and User Experience Enhancement, Application Infrastructure Projects, New SocialFi and Community Applications, and DePIN.
Read the full report here: https://htxventures.medium.com/htx-ventures-releases-2024-half-year-investment-report-highlighting-six-key-investment-directions-aa2e77b0a034
About HTX Ventures
HTX Ventures, the global investment division of HTX, integrates investment, incubation, and research to identify the best and brightest teams worldwide. With more than decade-long history as an industry pioneer, HTX Ventures excels at identifying cutting-edge technologies and emerging business models within the sector. To foster growth within the blockchain ecosystem, we provide comprehensive support to projects, including financing, resources, and strategic advice.
HTX Ventures currently backs over 300 projects spanning multiple blockchain sectors, with select high-quality initiatives already trading on the HTX exchange. Furthermore, as one of the most active FOF (Fund of Funds) funds, HTX Ventures invests in 30 top global funds and collaborates with leading blockchain funds such as Polychain, Dragonfly, Bankless, Gitcoin, Figment, Nomad, Animoca, and Hack VC to jointly build a blockchain ecosystem.
Feel free to contact us for investment and collaboration at [email protected]
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