- The prolonged crypto winter has prompted Braintrust to dump the tokens escrowed for investments.
- Tiger Global has sold hundreds of thousands of BTRST tokens issued by Braintrust amid the bear market.
- The crypto winter underscored the issues surrounding venture capital firms in the crypto industry.
The ongoing crypto winter has prompted investment giant Tiger Global to reconsider its involvement with the crypto space. Since the beginning of 2023, Tiger has dumped hundreds of thousands of crypto tokens in a bid to recoup its investment and conserve cash. One of its most high-profile investments, Braintrust, has costed the venture capital firm millions of dollars.
According to a report by Fortune, Braintrust, a blockchain-powered recruitment platform, was one among Tiger Global’s investments into private tech firms, in 2021. In return for the investment, the venture capital firm received millions of Braintrust tokens (BTRST) instead of getting a stake in the crypto startup.
The BTRST token served as Brainstrust’s currency and facilitated rewards to the platform’s users. Apart from issuing the tokens to Tiger, Braintrust also sold a significant sum to the VC giant. The sale included a multiyear lock-up agreement in order to prevent Tiger from dumping the tokens and tanking its price.
The bet on Braintrust initially paid off as Tiger Global made a handsome return during 2021’s bull run. However, the collapse of crypto giants like Terraform Labs and FTX in 2022 triggered a market-wide sell-off leading to tanking prices and the ongoing crypto winter. The crypto market capitalization went down by a whopping 70%.
This prompted Tiger Global to hire institutional investment firm FalconX to sell hundreds of thousands of BTRST tokens. As per on-chain data reviewed by Fortune, wallets associated with Tiger Global have been dumping tokens since January 2023 in an attempt to calm their limited partners.
The sell-off hurt BTRST’s price, which has lost more than 20% of its value this year. Braintrust co-founder Adam Jackson stated that he was confident in his firm’s crypto-based strategy. Jackson argued that the decline in BTRST’s price had no impact on his platform’s utility.
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