Web3 startups are experiencing flourishing growth in the Middle East and Asia while North American entrepreneurs face challenges amid macroeconomic and regulatory constraints, according to Animoca Brands CEO Yat Siu. Speaking with Cointelegraph at the Collision conference in Toronto, Siu emphasized that the global environment for crypto businesses is not as dire as it may seem.
Although Web3 startups can still secure funding from venture firms, prevailing factors like higher interest rates and a decline in crypto asset prices have raised the bar for newcomers. Siu acknowledged that valuations have decreased, but he remains optimistic, citing the increasing number of builders, smart contracts, and participants in the space. Animoca Brands has even added nearly 60 investments to its portfolio in recent months.
However, the overall strength of the crypto space has waned. According to the PitchBook Crypto Report for Q1 2023, crypto companies raised $2.6 billion across 353 investment rounds, representing an 11% decrease in deal values compared to the previous quarter.
Siu’s comments follow significant developments that have impacted the crypto industry, such as the collapse of FTX in November 2022. While the United States has cracked down on crypto firms through regulatory enforcement actions, countries like Hong Kong and the United Kingdom have taken steps to implement licensing systems and enforce regulations for crypto businesses.
Siu observed that the regulatory aspect has created fear and uncertainty, particularly in North America, where people are unsure about the future of the industry. Conversely, the Middle East and Asia have vibrant crypto ecosystems. Siu believes that different countries’ approaches to the industry are not coincidental but rather strategic decisions aligned with their national interests and agendas for emerging technology.
While Siu acknowledges the importance of the United States in the crypto landscape, he sees its withdrawal from the industry as an opportunity for other regions to foster thriving ecosystems that were previously restricted.
