Blockchain.com Valuation Could Shrink by $10B, Report Says

Crypto trading platform Blockchain.com is considering a “down round” of funding that could slash the company’s value from the $14 billion it reached this year.

That’s according to a report Sunday (Oct. 30) by Bloomberg News, citing sources familiar with the matter.

Although the potential round is still in discussion, the financing will likely shrink Blockchain.com’s valuation to between $3 billion and $4 billion, one of the sources said. Blockchain.com was not immediately available for comment Sunday.

The company has struggled — as have many of its competitors — since crypto prices began falling earlier this year. Blockchain.com announced it was laying off 150 people — a quarter of its staff — in July.

Those layoffs came in the wake of the company’s $270 million loss to Three Arrows Capital, a crypto hedge fund that had an estimated $10 billion in assets and made several extremely risky investments in decentralized finance projects such as the Terra/LUNA algorithmic stablecoin.

The funding occurs at a time when venture capital investment in crypto is dropping as startups struggle due to this year’s big digital currency selloffs. As PYMNTS noted earlier this month, worldwide VC investments for the quarter were $4.44 billion, down 37% from the same period last year.

The pullback also comes as there’s been a downturn, in general, in investing in tech companies, although crypto investing has seen a sharper drop due to the higher risks.

Nevertheless, the rocky crypto market hasn’t been enough to convince people not to invest in digital currencies, according to a survey released last week by Fidelity Investments.

The company’s findings showed that 58% of institutional investors invested in digital assets in the first half of 2022, a six-point increase from 2021, while nearly three-quarters of investors said they plan to invest in the future.

“While the markets have faced headwinds in recent months, we believe that digital assets fundamentals remain strong and that the institutionalization of the market over the past several years has positioned it to weather recent events,” Fidelity Digital Assets President Tom Jessop said in a news release. “Institutional investors are experienced in managing through cycles, and the largely inherent factors that they cited as appealing in this study will likely remain as the market emerges from this period.”