I have wondered aloud how damaging the dent to cryptocurrency’s reputation has been in recent months.

The FTX collapse (deep dive into that sordid business here) felt like a final straw in many ways. When it came to institutional adoption, the tantalizing conclusion was that any big-name company would be a mile out of the industry, as a wave of scandals, bankruptcies, and implosions cascaded through the space.

In this context, I was struck by the news that venture capitalist Tim Draper is delving into cryptocurrencies. The Draper Venture Network, which is an alliance of venture investors founded by Draper, will launch a web3 syndication vehicle called the Draper Round Table with the goal of attracting more family offices, corporate venture capitalists, angel investors and others to web3.

The world of investing is changing rapidly. We are expanding investor access so that the best entrepreneurs, wherever they are, can be financed

Tim Draper, Founding Chairman of the Draper Round Table

Draper has a crypto background

Tim Draper is not a crypto novice, of course. The business mogul bought 30,000 bitcoins in 2014 that were seized from Silk Road, the illegal market. The stash was auctioned off to the public by the US Marshals Service, with Draper stepping in with $19 million, which translated to a price of $633 per coin.

Just for fun and games, I traced Draper’s investment below, up to today, when Bitcoin jumped at the start of the year, trading back above the $20,000 mark.

The drop from over $2 billion to $600 million probably hurts, but hey, that’s still a 33X return. Outperforms the S&P 500.

Three months after the purchase, Draper had notoriously predicted on Fox Business that the orange coin would top $10,000 in three years. One bitcoin was trading for $402 at the time and it sounded… well, it sounded ridiculous. When it fell to $200 the following January, things were not looking good, especially when he doubled down that the price would rally, betting $400,000.

But by November 2017, Bitcoin was at $10,000 (technically this was three years and two months later).

Crypto hurts on the main stage

It’s clear that Draper’s history with crypto goes back further than most, to a time when it was still a niche internet that only niche internet people paid attention to. With that context, perhaps the launch of this Draper Venture Network does not symbolize anything at all.

On the other hand, it highlights that there are still deals to be closed in this industry that has been devastated by the bear market. Looking at the last crypto winter, some of the most successful companies this time were built during the fallow years of 2018 and 2019 when it seemed that nobody I was paying attention to cryptography. It would certainly be hard to imagine such a thing even when the market lagged so far last winter.

Of course, the difference from this winter is that cryptocurrencies are fighting a bear market in the broader economy for the first time in their history. It’s funny how often people forget that Bitcoin launched the longest and most explosive bull market in history and therefore makes this current climate of high interest rates and falling prices unprecedented.

Time will tell how the crypto will recover from this bear market. With inflation softening, it certainly looks like brighter weather now than it did a couple of months ago. News like this will help, and it will be interesting to track how quickly traditional institutions and investors return to the space in the coming months.