In a recent statement, Justin Bons, Founder, and CIO of Cyber Capital Europe’s oldest cryptocurrency fund, criticized the current dominance of Venture Capitalists (VCs) in the cryptocurrency market. Bons believes that regulatory pressures have effectively made Initial Coin Offerings (ICOs) illegal, leaving the early-stage market solely in the hands of VCs. This situation has led to what Bons describes as “predatory VCs” taking over the cryptocurrency space.
Bons argues that the current VC model in the crypto market is unfair and exploitative, with VCs acquiring tokens at heavily discounted prices through “pre-pre-pre-sales” before selling them to retail investors at inflated rates. This practice, according to Bons, drives small investors away and punishes retail participants. He believes that bringing back ICOs, which democratized fundraising in the crypto space, is necessary to level the playing field for all investors.
Another analyst, Miles Deutscher, has also expressed concerns about the current fundraising dynamics in the cryptocurrency market. Deutscher views the dominance of VCs as one of the “fundamental flaws” preventing cryptocurrencies from reaching their full potential. Both analysts agree that the VC model is not conducive to the healthy development of the crypto market and that it hinders retail participation in early-stage investments.
In light of these criticisms, Bons calls for a reevaluation of the current regulatory landscape surrounding cryptocurrency fundraising. He believes that allowing retail investors to participate on equal terms is essential for the healthy development of the market. While acknowledging the important role that VCs play in funding early-stage projects, Bons argues that the current regulatory environment has artificially pushed their prominence to unhealthy levels.
Bons advocates for a return to a more open and transparent investment model in the crypto market, where knowledge and expertise, rather than privileged access, determine investment success. He emphasizes the need to convince regulators to allow retail investors to participate in early-stage investments, as this will help prevent their exploitation at later stages. Overall, Bons calls for a shift towards a more inclusive and fair fundraising model in the cryptocurrency space to benefit all investors.
