Mastercard raises funding for cryptocurrency start-ups. What does this tell us?
Mastercard has announced the addition of seven new cryptocurrency startups to its Mastercard Start Path programme. It was launched back in 2014, with more than 1,500 startups applying and raising $3.5 billion in funding over the past eight years. They will now be joined by young development teams from various sectors of the crypto-sphere. Here’s a closer look at what’s going on.
Note that Mastercard representatives are not only commenting on what’s happening in the digital asset industry, but also connecting with it. For example, in August 2022, the company’s CFO, Sachin Mehra, said that crypto is hardly a convenient means of payment. However, coins may well qualify as a separate asset class.
A month earlier, the company had confirmed its involvement in the launch of Miami’s official NFT collection. Read more about it in a separate piece.
Which companies support cryptocurrencies
Those platforms that qualify in the programme’s competition will get access to ‘must-have growth’ opportunities, collaborations with other firms, mentors and many other things that help seriously accelerate a company’s growth. All of this is now available to seven cryptocurrency developer teams from five countries.
From the US, the programme includes payments company Loot Bolt, privacy and regulatory collaboration startup Quadrata, and Uptop, a startup that helps brands achieve a more personalised customer experience using blockchain. The rest of the contestants are working at startups in Abu Dhabi, Colombia and Dubai.
Mastercard Start Path
According to Decrypt’s sources, Mastercard is not the only corporation attracting crypto start-ups. Something similar was started last year by the Binance exchange in France. In particular, it announced a $100 million investment pool as part of the Objective Moon program. It was aimed at creating a Binance research and development centre in France to attract blockchain talent across the country.
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And while one region is making progress in the adoption of cryptocurrencies, other parts of the world are unfortunately struggling with it. The day before, Australian investment firm Cosmos Asset Management announced the delisting of two exchange-traded funds (ETFs) for Bitcoin and Etherium. Cosmos Purpose Bitcoin Access ETF (CBTC) and Cosmos Purpose Ethereum Access ETF (CPET) were launched in May this year along with two other competing ETFs that went public on the same day, becoming the first funds listed on the Australian stock market.
As a reminder, an ETF is an investment vehicle that is an exchange-traded fund for a particular asset. In the case of cryptocurrencies, an ETF allows large investors to capitalise on movements in digital assets without buying them directly. This saves them the potential inconvenience of holding and preserving digital assets. Read more about the topic of Bitcoin ETFs in a separate piece.
Both investment products have been “problematic” from the start. The process of launching the Australian ETFs was slow and subject to many delays until the last moment before listing. The market also chose to list at one of the worst times of the year, on the 12th of May. Recall that this was the month when the Terra ecosystem collapsed, causing a massive drop in market capitalisation.
Cryptocurrency rates today
The subsequent bearish trend contributed to Cosmos’ difficulties. The company never even managed to cover the high costs of managing exchange-traded funds. In six months of trading, the price of CBTC fell by nearly 19 percent, while CPET’s value fell by about 13.8 percent. Trading in both funds was halted this Monday.
Another interesting detail: Cosmos was previously owned by mining company Mawson Infrastructure, whose shares were traded on Nasdaq. However, the management of Mawson Infrastructure concluded that “playing the long game” with crypto ETFs could not be profitable, and sold the investment company.
That said, the main reason for Cosmos Asset Management’s failure in the end was the wrong date for the listing of exchange-traded funds, which could hardly have been foreseen. The crypto market develops in cycles and the listing of the aforementioned ETFs came at precisely the tipping point, when all participants realised that the “crypto-zima” was finally coming.
We believe that this news will add points to the reputation of the digital asset industry. It also makes sure that cryptocurrencies are getting the attention of the world's biggest companies at a high pace. Most importantly, it comes during a bearish trend, when coins traditionally don't attract new users.
What do you think about this? Share your opinion in our Millionaire Crypto Chat. There we will talk about other important topics related to the world of blockchain and decentralisation.
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