The economic landscape may seem dire at the moment, but it’s unlikely to affect blockchain development, according to Pantera Capital CEO Dan Morehead. In an interview for Real Vision on Thursday, the venture capitalist said that he believes blockchain technology will perform based on its own fundamentals, regardless of the conditions indicated by traditional risk metrics:

“Like any disruptive thing, like Apple or Amazon stock, there are short periods of time where it’s correlated with the S&P 500 or whatever risk metric you want to use. But over the last 20 years, it’s done its own thing. And that’s what I think will happen with blockchain over the next ten years or whatever, it’s going to do its own thing based on its own fundamentals.” 

During the first half of this year, Pantera Capital raised about $1.3 billion in capital for its blockchain fund, with a special emphasis on scalability, DeFi and gaming projects. “We’ve been very focused on DeFi the last few years, it’s building a parallel financial system. Gaming is coming online now and we have a couple hundred million people using blockchain. There’s a lot of really cool gaming projects, and there still are a lot of opportunities in the scalability sector,” he added.

Long-term optimism contrasts with the actual drop in venture capital in the industry, however. August saw the fourth consecutive month-on-month decline in capital to $1.36 billion, according to Cointelegraph Research data. The inflows represent a 31.3% drop from July’s $1.98 billion, with 101 deals closed in August, on an average capital investment of $14.3 million — a 10.1% decline from July.

The crypto winter was expected to spur consolidation in the sector, but recent numbers from Crunchbase revealed that only four deals with VC-backed crypto companies were concluded in the United States this quarter — a setback from the 16 transactions from the first quarter of the year.

Sandeep Nailwal, the managing partner at Symbolic Capital, explained that the bear market has pushed away even big players in the industry:

“Everyone was expecting M&A to take off in crypto as we headed into this bear market, but we haven’t seen that happen yet. I think the main reason for this is that the downturn hit the industry so fast and so intensely that even large companies poised as aggressive acquirers were so shell-shocked by the crash that they had to make sure their own balance sheets were in order before looking elsewhere for growth.”

The crypto exchange FTX does not seem to be affected by this problem. The company has reportedly engaged in talks with investors to raise $1 billion in new funding to finance additional acquisitions during the bear market. “We have been seeing valuations come way down from pre-summer highs and you have to think there are a lot of acquirers out there, especially in the CeFi space, looking at these low valuations and thinking to themselves that everything is on sale right now. FTX certainly felt that and they were extremely prudent in how they took advantage of these market conditions to fuel their growth,” said Nailwal. 

FTX’s investment arm announced earlier this month that it had acquired a 30% stake in asset management firm SkyBridge Capital for an undisclosed amount, and the Canadian crypto platform Bitvo was purchased by FTX in June.

In the opposite direction, e-commerce company Bolt halted plans to acquire Wyre, a crypto and payment infrastructure company, after announcing a $1.5 billion deal in April. Weeks before, the cryptocurrency investment firm Galaxy Digital decided to drop the acquisition of the digital asset custodian BitGo, citing a breach of contract.

BitGo filed a lawsuit against the crypto investment firm for terminating the acquisition, seeking more than $100 million in damages, and accusing Galaxy of “improper repudiation” and “intentional breach” of its acquisition agreement.