Highlights
GCR is a research and investment community. As a collective, we source investments, conduct research and diligence, and make investments together.
This piece lays out some highlights from the past quarter, as well as 2023 as a whole:
In 2023, the GCR Community deployed over $270K of community-sourced capital across 4 deals.
The GCR Community saw over 33 investment opportunities in Q4, of which 24, or ~12% came directly from community members and contributors.
The only top category we invested in was once again Infrastructure.
During Q4 2023, GCR invested in a total of 1 deal.
GCR Core Team presents Q4 macro review and shares our outlook for Q1 2024.
2023 Year in Review
At GCR, our mission is to create a community-driven investment DAO where the best Web3 investment opportunities are brought in by the community for the benefit of the community.
Since this new initiative’s inception in March 2022, we have experienced unrivaled success:
The GCR Community saw over 170 deals during 2023, of which ~34% came directly from the community members, with increasingly more contributions coming from members in Q3 and Q4. This is a testament to the increasing demand and support for a truly community-driven investment platform.
From our robust deal pipeline, the community invested over $270K across 4 deals in 2023 and invested $42M across 72 deals to-date. Through our decentralized platform, GCR members enjoyed the flexibility to handpick their own investments and invest alongside prominent VCs such as 1kx, a16z, Coinbase Ventures, Electric Capital, Sequoia Capital, etc.
Robust Community-Driven Investing Despite Market Conditions
Q4 2023 Summary Stats
The GCR Community continues to make significant strides, demonstrating unwavering discipline in curating top-notch deal flow and forging partnerships with high-conviction companies.
During Q4 2023, the community assessed 33 deals, notably lower than in Q3 2023 but still ample. Specifically, approximately 12% of these opportunities were directly contributed by community members and contributors. This figure contrasts with the 65 investment opportunities observed in Q4 2022, where ~35% were community-sourced.
Q4 2023 saw the lowest volume of deal opportunities in 2023, primarily due to the holiday season.
When categorizing the opportunities explored by the community, Infrastructure and DeFi/CeFi remain the most prevalent at approximately 37% each, and Gaming and Social at around 20%.
Furthermore, the community solely focused on investments in the Infrastructure category during this quarter, similar to Q2 2023 as well as Q3 this year.
In alignment with the prevailing market sentiment and the discerning approach of the GCR Community, GCR executed only 1 deal in Q4 2023, a notable difference from the 6 deals invested in Q4 2022, but slightly down from the 2 deals we executed in Q3 2023.
Lastly, our own spin-off GCRx started steadily supporting small syndicates and other investment communities by setting up SPVs and handling the operations.
Every quarter, we proudly share our progress to showcase the capabilities of GCR’s community-led investment platform. The GCR Community continues to grow stronger as members educate each other about their specific areas of expertise. If you would like to learn more about how you can be involved with the GCR Community, join our Discord.
Q4 Appears to Be Mixed
The last quarter of 2023 has seen some impressive but concentrated surge of capital raising for accelerators and Web3 funds. Last year has been the 3rd largest year in terms of VC activity for crypto ever, but significantly less than 2021 and 2022. According to Galaxy, usually, the BTC price and VC activity correlate, however, the deal activity didn’t seem to pick up as fast as the BTC price development.
Topics like AI, Bitcoin Ordinals and direct-to-customer protocols seem to attract accelerators’ interest. According to Cointelegraph and Messari, in the last quarter, there was an 81% surge in deal volume reaching $3.83 billion, dominated by Blockaid with $33 million, Ritual with $25 million, Drift with $23.5 million and more.
On a broader view, it is worth noting that according to GlobalData, venture capital funding in the US decreased notably from January to November 2023. Compared to the previous year, there was a substantial 44.1% decline, bringing the total down to $104.5 billion. The decline in VC funding within this timeframe may have implications for startups and emerging businesses seeking financial support and could reflect broader trends in investor confidence or strategic investment decisions within the tech and innovation sectors.
We remain optimistic about both GCR’s prospects and the future of crypto space. We anticipate more crypto-friendly jurisdictions like Singapore and the United Arab Emirates will continue to foster an active builder environment for crypto.
Along with jurisdictions coming up like Hong Kong attracting and encouraging new developments in Crypto by setting up a comprehensive crypto framework. The framework includes requirements for crypto exchanges and wallet providers, as well as guidelines for DAOs. The government emphasizes the need for consumer protection, Anti-Money Laundering (AML) measures, and maintaining the city’s reputation as a global financial hub.
Source: Galaxy Research
Doing a deep dive on the European side, an update on the Digital Euro has recently been published, regarding the rulebook which has been set up by relevant industries and the European Commission. The aim is to set up relevant and appropriate rules together with affected industries and let them be reviewed by experts. Zooming out, the CBDC topic is being explored by many central banks with different purposes and goals. One key factor that has to be considered is the interoperability of CBDCs with each other. Yet, it is still questionable how the relationship between stablecoins and CBDCs will be – that can be a key factor for adoption.
On the side of tokenization, one topic dominated the news in central Europe, where the first external transaction of a tokenized mutual fund has been completed into an existing retail mutual fund. This was made possible by Union Investment, Metzler, Cashlink, and Fundsonchain. This marks a new chapter for TradFi exploring tokenization in existing retail products.
Global Macro Outlook
The past quarter saw in a rallye fueled by the rumors of the Spot-ETF and the incoming institutional capital resulting in a surge of 160% BTC and 90% ETH. This development is expected to continue due to investment related and economic factors. With the increasing maturity of blockchain projects and increasing collaboration of web2 and web3 industries, more volume will come onto blockchain infrastructure.
Steady but slowly
The narrative “higher for longer” is still valid, where the Fed is expected to cut rates in the second half of 2024, however, slow cuts are expected. According to JP-Morgan, the probability of a deep recession is valued at 25%. Inflation has globally decreased from 10% to a current pace of approx 5%.
Institutional investors are bullish on BTC
Institutional investors are overwhelmingly bullish on Bitcoin ranging from $80,000 up to $200,000 – according to Standard Chartered. It’s all connected to the BTC ETF-approval with the expected inflows of fresh capital from institutional investors. According to the bank, $50 billion to $100 billion could flow into the ETF, which could be parallelled to the gold ETP.
Real World Assets connect both worlds
The narrative of real world assets (RWA) is around for quite a while, projects are building up infrastructure to facilitate. Both European and US-American players are progressing on tokenizing financial instruments and real estate. According to Bitwise $5 billion in financial instruments have already been tokenized and the biggest player in the market JP-Morgan is planning to set up a tokenized fund to take advantage of DLT settlement. Also across the pond, the German asset manager Union Investment has completed the first tokenized transaction of a tokenized mutual fund into a retail fund. RWAs are set to have a potential up to $16 trillion by 2030 according to the Global Financial Markets Association.
New and refreshed narratives
Besides RWAs, new and refreshed narratives seem set for 2024. Where new narratives like prediction markets are seen as a “killer app”, evergreen narratives like NFTs are seen to be – among other use cases – fan articles. Taylor Swift is using NFTs to interact with her fans and provide unique access to songs, concerts and experiences. One way to use these NFTs is over spotify with the tokengating access to special content.
Furthermore, according to a16z, AI + blockchains will come together. With decentralization, open-source crypto networks will democratize AI innovation that can enable a multi sided training of AI and not leave it in the hands of big tech giants.
Recap 2023 incl. Q4: The Crypto Goliath is Slowly Waking Up
Some highlights according to the Tradingview and CoinGecko’s Annual Report:
The Total Crypto Market Cap rose +108.1% in 2023, from $829 billion to $1.72 trillion.
Trading volume increased from $6.7 trillion in Q3 to $10.3 trillion at the end of the year with a gain of 53.1% with centralized exchanges dominating here over decentralized ones.
Bitcoin saw a surge of 64% in Q4 and 155% in 2023 due to the optimism of the BTC ETF reaching a high of $44,004 not seen since April 2022.
Ethereum with 34% in Q4 due to an increase in the trading volume and 90% over the year.
NFT trading volume amounted to $11.8 billion with Ethereum still being the dominant chain here followed up by Bitcoin and Solana. High trading activity in NFTs is partly due to the strong Bitcoin Ordinals trading.
BTC, ETH, Ripple (XRP) and Dogecoin (DOGE) appear to be the top 4 most liquid coins in Q4 according to TradingView. DOGE flipping BNB in terms of liquidity is probably caused by the news regarding the change of leadership and regulatory concerns about Binance in the past year. BNB is still in 3rd position in terms of market capitalization.
Solana’s network activity and therefore the price saw a massive increase in the last quarter fueled by meme-coins on Solana. The coin ended the 90-day period marking a 423% increase compared to the previous quarter and over 1000% growth year-over-year, according to AMBCrypto. In contrast, Solana witnessed a minor decrease in staking activity by 5%, a dip possibly driven by a series of unstaking activities by FTX Estate.
Join Us
We continue to be excited about what lies ahead in 2024 for GCR and the rest of the crypto community.
If you are a startup raising capital and are interested in learning more about what it is like to have the support of a community with thousands of members, please reach out to one of our GCR Core Team Deal Leads!
If you are a Web3 enthusiast and are interested in learning about new crypto projects, investing alongside sophisticated members, and sharing investment opportunities, hop into our Discord and join the conversation.
As part of our effort to onboard the next one billion users to crypto, we are giving away complimentary 1-month Gold memberships to people who are aligned with GCR’s core values and are seriously interested in investing with us. If you are interested, please fill out this form here.
Please reach out if you have any questions, comments or feedback! We welcome the dialogue.
This article has been written and prepared by the GCR Team, a group of dedicated professionals with extensive knowledge and expertise in their field. Committed to staying current with industry developments and providing accurate and valuable information, GlobalCoinResearch.com is a trusted source for insightful news, research and analysis.
Disclaimer: Investing carries with it inherent risks, including but not limited to technical, operational and human errors, as well as platform failures. The content provided is purely for educational purposes and should not be considered as financial advice. The authors of this content are not professional or licensed financial advisors and the views expressed are their own and do not represent the opinions of any organization they may be affiliated with.
