Australian Crypto Entrepreneur Lost $267 Million After Deal Collapsed Amid Crypto Market Plunges

Australian Crypto Entrepreneur Lost $267 Million After Deal Collapsed Amid Crypto Market Plunges
Golden Ripple (XRP) cryptocurrency coin with candle graph background, Crypto is Digital Money within the blockchain network, is using technology and online internet exchange. (Jo Panuwat D/Shutterstock)

An Australian cryptocurrency investor has lost US$267 million after failing to secure funding for his Silicon Valley-based blockchain start-up as the digital currency market remains in a knockout.

Michael Dunworth, the co-founder of Wyre, said he was dealt a heavy blow by the news last week that US online checkout company Bolt Financial Inc scrapped the $1.5 billion deal with his company.

"I suppose money isn't really in the bank until it's in the bank," Dunworth told the Australian Financial Review on Sep. 20.

"I'm trying to be as realistic as possible. Otherwise, you're only going to break your own heart. But there is the thought that I could have worked this whole 10 years for zero dollars."

The 36-year-old didn't explain why the deal was axed. But he said that times have changed.

“We had multiple parties interested last time, and though the market has changed, I’d be surprised if that wasn’t the case now,” he said.

Dunworth also told the AFR that his company could either look for another buyer or move towards listing the company on the stock exchange.

Meanwhile, San Francisco-based payments giant Bolt, which was valued at $11 billion in January, said it would continue its partnership with Wyre while remaining independent so that it could focus on its core areas.

"We will continue our existing commercial partnership with Wyre to pave the path of crypto integration into our ecosystem, bringing Wyre's innovative crypt infrastructure to the world," Bolt's CEO Maju Kuruvilla said, Reuters reported on Sep. 10.

Plunging Valuations in Crypto Businesses

It comes amid the backdrop of tumbling crypto price, with the market valuation in June less than half of the $2.9 trillion it was worth in November.
According to Forbes, the value of crypto leader Bitcoin plunged more than 60 percent since the beginning of this year, with its current price hovering around $19,000. Ethereum's valuation has dropped by 64 percent, with the currency's price staying around $1,320.

Associate Professor Elvira Sojili noted that the opportunity cost of investing in digital currency increases as money gets more expensive.

"In addition, demands/costs of investments elsewhere also increase, which push investors to take money out from the more volatile assets like crypto and equity to the safer assets, like cash and bonds," she told UNSW Newsroom on June 29.

UNSW Business School Senior Lecturer Eric Lim added that the crypto market is not divorced from global or macroeconomic events.

"Currently, we are seeing a macro environment where all financial assets are having a bad time. In the US, the Federal Reserve (the Fed) is attempting to induce a global recession by raising interest rates. The last thing that any investors want to do is to fight the Fed on this. This means investors are going to deleverage most financial assets and seek safer investments," he said, reported UNSW Newsroom.

"Therefore, there will not only be selling pressure and weakness in the crypto market but also in the financial markets more generally."

Nina Nguyen is a reporter based in Sydney. She covers Australian news with a focus on social, cultural, and identity issues. She is fluent in Vietnamese. Contact her at [email protected].