Today ether gets a Boost after crypto Prices hold firm through the weekend Marathon digital is selling a quar Billion dollars in convertible notes to Buy more Bitcoin and pitchbooks Robert Lay breaks down the findings of the Research firm's second quarter crypto Report highlighting VC Trends welcome to cnbc's crypto world I'm Brandon Gomez Bitcoin back into the $60,000 territory over the weekend and Held its ground this morning the crypto Currency was inching just a tiny bit Higher by noon Eastern to $6,200 Ether also in the green this Morning climbing nearly 2.9% xrp meanwhile Rising a little less Than 1% okay let's talk about the top stories For today Mining Company Marathon Digital plans to offer $250 million in Convertible notes in order to buy more Bitcoin in the announcement this morning Marathon said the sale was subject to Market conditions but that the Convertible notes would be offered to Instit tional investors in a private Sale those notes would mature in 2031 And pay interest semiannually in March And September beginning on March 1st of 2025 now as a refresher convertible Notes are debt that a company can take On but rather than paying back the Principle and interest investors are
Paid back with equity in the company Around noon Eastern marathon's stock had Fallen more than 65% after the Announcement next bankrupt crypto lender Celsius is suing tether in the hopes of Clawing back tens of thousands of Bitcoin now worth billions of dollars at Today's price Celsius said it filed a Lawsuit to quote avoid and recover Preferential and fraudulent transfers of 39542207 Ry through several more requests for Collateral now as part of this lawsuit Celsius is asking the court to order the Return of tens of thousands of Bitcoin Claiming it was preferentially Transferred and award them no less than $100 million in Damages for tell's Alleged breaches of contract this Morning tether responded to the suit in A blog post saying it would defend Itself against a quote Shakedown by Celsius tether argues the lawsuit tries To improperly impose the cost of Celsius Mismanagement and fail on Tether all Right pitch book's second quarter crypto Report dropped today that report Revealed that crypto startups raised Slightly more from Venture Capital Funding in the quarter compared to q1 of This year despite the total number of Deals dropping for our main story crypto World's Talia Kaplan spoke with Pitchbook crypto analyst Robert L about
The findings and what we can expect from The rest of the Year I reviewed your new Q2 crypto Report and see that in the quarter Crypto startups raised $2.7 billion Across 503 deals that's a 2 and a half% Bump in invested Capital compared to q1 Of this year now that increase came even With a 12 and a half% drop in Deal value That's different than what we saw in q1 Of this year when there was an increase In both deal value and deal count but The results Mark the third straight Quarter of gains as it relates to Investment value so what do these Q2 Numbers signal to you obviously with the Drop in deals and more capital invested The size of the deals in Q2 must be Bigger but why do you think that is and Where is the capital going what crypto Projects got the most investment Dollars yeah so um like you said the Deals um you know the deal count went Down but the total deal value went up to $2.7 billion so on a deal by deal basis The check sizes are larger which means You know you see that investors are Really uh doubling down and putting Money into those strongest crypto Companies you know the ones that been Building you know through the bare Market you know over the last two years And have gotten to place now where They're Finding Traction they're finding
Product Market fit you know they're Getting users so um you're seeing the Check size is bigger getting bigger for Those specific companies and we're Seeing um it's very similar to what We've seen over the last six months Infrastructure deals are getting um a Significant amount of the money uh layer One Solutions and Layer Two scaling Solutions as well um you know we saw Barry chain and Monet had raised uh These Mega rounds uh this past quarter And then so those are kind of like the Areas you're seeing infrastructure we Haven't seen a lot of applications yet But we do expect um applications to be You know the next wave of Investments That going to come in the next you know 12 to 18 Months so what would you say were the Driving forces behind the third Consecutive quarterly increase in Investment Values um investors have just been um Much more uh willing to invest in the Space now we really you steep back until Last summer when um Black Rock filed for The spot Bitcoin ETFs that's really when We solve the sentiment change with Investors in the private markets um a Lot of folks were saying hey look we Think that the uh the bull markets right Around the corner the bull market is Coming back so we saw you know investors
Were more willing to meet with Founders That are not part of the portfolio to uh Write new checks and then on from Founders they're finding it easier to Meet with investors and these Conversations have really accumulated Over the last six to eight months for us To see you know the uptick in in Deal Value did you see the same thing when Spot ether ETFs were approved here in The US um it's a little bit different I Think it's a little bit too early to say Um we think that it will drive more Investments but right now you know with What's gone in the crypto markets over Last week you know um uh a lot the Crypto Market is down so we'll see how How that works but I think overall the Spot eth ETFs was pretty successful in The first week we saw a billion dollars Of inflows into these ETFs so we'll see If that continues we don't know the Momentums can be strong as Bitcoin when Those um ETFs started trading back in January but you know so far it seems Like they're doing pretty well and then I think on over a very long period over Long term it's going to be really good For the ethereum Ecosystem and it certainly will be very Interesting to see if that does in fact Happen but do you think the streaks of Quarterly bumps in investment values Will continue into the next quarter when
We spoke in the past you noted that Crypt VC Investments typically rise when Crypto markets are doing well and Recently as you noted Bitcoin Experienced a selloff and it's trading Well below its record of more than $73,000 reached back in March so how Will crypto's performance this quarter Play into investor interest and do you Anticipate the increase in capital Invested will continue especially with The expectations of lower interest rates In the mix Yes we do expect investors to continue Um deploying Capital into the space um It will continue to increase just Because you look at the amount of um dry Powder that exists in the crypto native Venture funds and Venture funds are now Coming to Market again to raise new Funds so there's fresh Capital coming Into the market so I think all that Would push the amount of Investments Going into the space up um the thing is We won't I don't expect it to be as Strong as it was in uh 2021 and 2022 um you know historically there's a Very strong correlation between you know Private investments into crypto startups And the publicly traded crypto tokens um We saw you know the crypto market cap go You know very close to its peak back in March about 93% of its peak I don't Think we'll see private Investments
Reach 93% of his 2022 Peak because 93% Would be roughly $25 billion doar invest In um I don't think we're going to reach $25 billion of invested capital in to The crypto space over this year or next Year we'll probably get a much higher Than the last um the amount invested Last year of1 billion I think this year Will probably end somewhere between 12 To 14 billion of invested capital and Maybe next year a little bit more than That but nowhere close to the 2022 Peak Even though um the publicly traded um Tokens reached you know pretty close to Peak earlier this year interesting now What areas of crypto got the least Investment dollars this past quarter and Why do you think that is um I I think The it's been a pretty long-term Trend Defi continues to get um the least Amount of invested capital from Venture They still do raise money but because The mechanism the mechanisms to raising Capital is different and defi a lot of DIY uh protocols come to Market by Launching a token um because a token uh Has a lot of value to the the defi Protocol so they don't necessarily go Into you know U uh the VC markets to Raise Capital so VC still do support Some def5 protocols some of the really Notable ones you know like unisoft last Year raised a really large round so um You still see some of those deals but
For the most part D5 protocols typically Raise money in a different mechanism so They don't go to VC so you see the Lowest amount of deals going into that Space now I recently put together a Report on the integration of crypto and Ai and according to architect Partners AI is pulling some investment dollars Away from other Technologies including Blockchain data sent to us from the Crypto advisory firm shows that in Q2 of This year AI private Investments totaled More than $40 billion dollar far Surpassing crypto Investments Elliot Chan with architect Partners told me That he expects the combination of AI And blockchain to be a quote powerful go Forward investable theme do you agree And do you think AI is in fact pulling Some Capital away from blockchain Investments um I think AI generally has Been a very hot sector over the last 18 Months so not surprising you know with The launch of chbt at the end of 2022 so Um it generally it's been pulling money From anywhere especially from generalist Investors that's where their attention Has been and you know even in the crypto Space the generalist VCS have left they Haven't come back yet um you know they Are definitely looking at the shiny ball And that's AI right now um where we Think that generalist investors will Come back will be at the cross-section
Of AI and crypto and so you know there Is a lot of new activities happening we You know in the research we uh Highlighted decentralized GPU networks Which is the hardware compute Infrastructure to help power AI training And AI inference so that is one area I Think there's many different areas as Well uh that you see you know just using Blockchains to verify data or using Blockchains to um you know incentivize Folks to participate in the AI ecosystem Um so there's many different areas and And so we do see um a lot more Capital Coming into that um the intersection of Blockchains and AI Le also explains the advantages and Challenges tied to decentralized GPU Networks as well as the main takeaway of The Q2 report you'll be able to check Out his full interview over at cnbc.com Cryptoworld And that's all we have today for crypto World we will be back here again Tomorrow we'll see you then [Music]
