Bitcoin boom bolsters bets on crypto as ‘short memories’ reignite institutional interest
- A surging crypto market is improving the outlook for deal flow, highlighted by recent acquisitions, following the approval of bitcoin and ether ETFs.
The change of heart can be seen in the improved outlook for deal flow, highlighted by Robinhood Markets’ purchase of crypto exchange Bitstamp on Thursday, to a resurgence of venture-capital investments to what some analysts are expecting to be record amount of initial public offerings of companies connected to the industry.
In the crypto market itself, there’s been a notable return of the hallmarks of previous bull markets: celebrities are once again promoting crypto, and new tokens are being created at a rate of thousands per day, with some 330,000 coins debuting in the Ethereum ecosystem in April and May alone, according to crypto data tracker Dune.
Taken all together, it demonstrates that there’s nothing like rising prices to make investors forget about past financial carnage – including bankruptcies of crypto exchange FTX and lender Celsius – in a market that’s most famous for its scandals and boom-and-bust cycles.
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“Investors often have short memories,” said Campbell Harvey, a finance professor at Duke University. “When market sentiment is high, they put extra weight on good news and tend to downplay the bad news that might have happened in the past.”
