Kavita Gupta, Founder and General Partner of the Delta Blockchain Fund, joins Cheddar News' Closing Bell, where she says crypto investors have been in a 'bloodbath' since last weekend and explains why Terra's Luna token fell from $117 to $0.02 in just over a month.

Closing Bell

Crypto in 'Bloodbath' Since Past Weekend

And as we showed you moments ago, the crypto markets selling off rapidly after we heard from many industry experts who earlier this year predicted the price of a Bitcoin could reach $100,000 a token by the end of the year. So where do we stand now? And where do we go from here joining me now to help with these questions is Kavita Gupta, founder and general partner of the Delta Blockchain fund in early stage product driven Blockchain fund activity. It's good to have you on the show how much concern is out there right now when it comes to crypto Kristen, thank you so much for having me. Um, and you did really good analysis and the breakdown of the numbers. Unfortunately we have been in a bloodbath since saturday. Uh, and luna literally wiped out multi billion dollars from ust wiped out. Um, and we are in an official bearish market today, people deep in crypto, people looking at evaluations didn't realize there was a sort of a bubble going on with a lot of defi liquidation coming up with pragmatic stable coins but looks like it is a sort of a market adjustment going from one extreme to another extreme unfortunately, but we are in the winter is here for the crypto market for sure. So what should investors do que vida, how do they navigate this? I think it depends upon the type of investors. Right. And of course I have to say no financial advice out here. But as a VC is a technology driven investor, it is, it is really good for us because the valuations of the technology company and the seed round pre seed round was completely crazy. People were raising $800 million. I just have an idea I can go and raise $100 million and we have already started have started seeing the adjustment in the technology price. But if you are a liquid investor, if you're just buying tokens and cryptocurrencies I think you have to be very smart because are we at the deepest dip? I don't think so. We have started, where is this market going to stable? It's difficult to predict. But at the same time do I truly am a bullish person in a long run with cryptocurrencies? Yes I am. And I think the technology the right products are going to build this back. So what are some of the companies and investments that you like out there? Kavita on the VC side of things? Yeah so we have like a bunch of stuff like for defi we have been we have invested in synapse and we have invested in Astra protocol which have been doing on chain cave. I see. Yes we are doing a lot of infrastructural stuff like instead of N. F. T. S. We invested in swap tv for borrowing lending, collateralize ng N. F. T. S. We are doing a lot of analytics, risk modeling analytics platforms to see how products are moving, how data is moving multi chains etcetera. I feel like in a in a big way, even when we look at the defi market from symbolizes to fondle, we have been looking at begging on a much more stable currencies like chic and Bitcoin then going for any of those compatriots problematic uh stable coins. Mm hmm. Now when it comes to the price of Bitcoin and other tokens, big name tokens out there, Kavita, how much does that impact what you do and just the overall confidence in the Cryptocurrency market in general. I think ust has definitely shaken a lot of people, not only outside investors but also inside investors. Like I know a lot of VC friends who have literally have 4050% stakes or nine digit numbers have wiped out pretty much. And I feel like that's the confidence of defi or the mistake which everybody made regarding whether stable coins should be 100% collateralized like us dc or gemini or like at least the way they divided between different corporate bonds etcetera, Treasury bills versus completely going and collateral. Izing it with another Cryptocurrency which has its own volatility like which is luna in this case and I think it's one hedge fund adding another hedge fund and this is what we have so definitely shaken a lot of confidence but also a really good lesson as we move forward. Right. So I want to talk more about luna, I think people need to understand what happened there. Que vida it sounds like you have some sort of grasp on the situation. We did see the price of luna right part of the terra Blockchain fall from over 100 and $15 a token in april just last month now under two cents today. Um It's issuer Tara halting the Blockchain moments ago. What happened here and why did it sell off so quickly? Yeah so I think just the point which you said the terror halted, they have actually announced that they have restarted it but without the usd liquidity because they really can't. Um I think the way UST works is like you have U. S. T. But it's not fair to any of the fiat currency which is the definition of a stable coin. It is actually begged to luna luna tokens which are free money printed by terra form labs which is terror. And so they just put it under their currency. So it's like creating a stable coin and saying hey I'm underlining it based on it or any currency which is under my brand. And uh luna. It all started with a lot of people started questioning last saturday. We we saw a bunch of discord messages and telegram messages hey so what is happening to the liquidation of us tea and like how much are they holding it up and then them taking out their liquidity from curve pretty much triggered it to the extent that it was very difficult even with a billion $2 billion plan of saving them, which were coming out as Dupont was tweeting yesterday and day before, especially day before on Tuesday and Wednesday, sorry, monday and Tuesday trying to save it. But Any amount of money coming into the space didn't save it because every time the peg would go up, 2.8.9 people started just getting out with less losses than to have faith in it. And I think that panic in the market just killed it. Alright. Kavita Gupta, certainly a rough day out there. Covid is the founder and general partner of the Delta Blockchain fund as someone who's in a good position on the VC side of things for now I have you to thank you.