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Australian Crypto Entrepreneur Lost $267 Million After Deal Collapsed Amid Crypto Market Plunges

Australian crypto investors have lost US$267 million after failing to secure funding for Silicon Valley-based blockchain startups as the digital currency market continues to take a hit.

Wyre co-founder Michael Dunworth said he was hit hard last week by the news that US online payment firm Bolt Financial Inc had scrapped a $1.5 billion deal with his company.

“The money isn’t really in the bank,” Dunworth told the Australian Financial Review on September 20.

“I try to be as realistic as possible. If I don’t, I’m just going to break my own heart. But I have this idea that I could have been working for $0 all these years.”

The 36-year-old did not explain why his contract was terminated. But he said his times have changed.

“Last time, multiple parties were interested. The market has changed, but now I would be surprised if it wasn’t,” he said.

Dunworth told AFR his company could either find another buyer or move toward a listing on the stock exchange.

Meanwhile, San Francisco-based payments giant Bolt, which was valued at $11 billion in January, said it would continue its partnership with Wyre while remaining independent so it can focus on its core areas.

Reuters reported on Sept. 10, Bolt CEO Maju Kuruvilla said, “We will continue our existing commercial partnership with Wire to pave the way for the crypto-integration ecosystem. to bring Wire’s revolutionary crypto infrastructure to the world.

Crypto Business Plunging Valuations

The June market valuation was less than half of November’s $2.9 trillion, on the back of falling cryptocurrency prices.

According to Forbes, the value of cryptocurrency leader Bitcoin has plummeted by more than 60% since the beginning of the year, currently hovering around $19,000. Ethereum’s valuation has fallen 64%, leaving the currency stuck at around $1,320.

Associate Professor Elvira Sojili pointed out that the opportunity cost of investing in digital currencies increases as money becomes more expensive.

“Furthermore, the demand/cost of investing elsewhere will also increase, prompting investors to shift their funds from more volatile assets such as cryptocurrencies and stocks to safer assets such as cash and bonds. ‘, she told the UNSW Newsroom on June 29.

Eric Lim, Senior Lecturer at UNSW Business School, added that the crypto market is not detached from global or macroeconomic events.

“We are currently seeing a macro environment where all financial assets are in trouble. In the US, the Federal Reserve (Fed) is trying to trigger a global recession by raising interest rates. The last thing a family wants to do is fight the Fed, which means investors will deleverage most financial assets and seek safer investments,” he said, referring to UNSW Newsroom. reported.

“Therefore, there will be selling pressure and bearishness not only in the cryptocurrency market, but also in the more general financial market.”

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Nina Nguyen is a reporter based in Sydney. She covers Australian news with a focus on social, cultural and identity issues. She is fluent in Vietnamese. Please contact her at nina.nguyen@epochtimes.com.au.

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