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Hi Reader, here's what you need to know for January 7th in 3:07 minutes.

🍾 The stock market’s got its own resolutions this year, and we’ll tell you all about them at How Will The Stock Market Perform In 2022? on Thursday. Tune in to find out whether we should be popping champagne, or if we’re better off quitting while we’re ahead.

Today's big stories

VCs poured a record amount of cash into US startups last year
If your crypto’s gathering dust, there’s one easy way to make it work harder for you in 2022 – Read Now
The Federal Reserve might raise interest rates faster than expected this year

Child Prodigies

What’s Going On Here?

They grow up so fast: data out on Thursday showed venture capital firms invested a record amount of cash into America’s startups last year.

What Does This Mean?

Venture capital (VC) firms invest in private early-stage companies in hopes they’ll grow up big and strong – or at least big enough to list on the stock market and make investors a serious profit. And filled with confidence after a wave of very lucrative initial public offerings, those firms plowed a record $330 billion into US startups last year. That’s nearly double 2020’s total, and helped push up their global investments by more than 90%. America’s VC funds have more than enough cash to back the next bright young thing too: they saw a record influx of cash last year, as rock-bottom interest rates made alternative investments – including VCs – a better bet for returns.

Why Should I Care?

The bigger picture: VCs might be overpaying.
All that demand has pushed up valuations of the pandemic’s heavy-hitters, like business software and ecommerce providers. Just look at Stytch: the two-year-old authentication platform hit a $1 billion valuation in November, which means it’s trading at more than 1,000x its yearly revenue. Compare that to the average publicly listed business software company’s 16x, and you’d be forgiven for thinking VC firms might struggle to make a profit later on.

Zooming in: VCs’ next frontier.
VC firms are paying a lot of attention to – and a lot of cash for – crypto startups: OpenSea announced on Monday that it raised $300 million in VC funding, valuing the NFT marketplace at $13 billion. That’s a near nine-fold increase from its valuation just six months ago, and it’s not hard to see why: NFT evangelists did spend over 600 times more on the platform last year than they did in 2020.

You might also like: How you can actually make money from NFTs.

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Analyst Take

How To Make Your Crypto Work Harder For You In 2022

Reda, Analyst

What’s Going On Here?

Ethereum’s all set for a major shift this year.

It’ll be moving from a mining model to a staking model, meaning you’ll be able to allocate your own ether to the network and earn more in return.

And it’s not the only one: there are plenty of “proof-of-stake” projects out there, all offering you a shot at substantial and ongoing rewards.

The biggest question that most investors come up against is: how do you start staking?

Simple. Just read today’s Insight: how staking works exactly, and how to earn an income from the crypto you already have.

Read or listen to the Insight here

A picks-and-shovels crypto play

There’s a whole world of crypto out there, from bitcoin to ether to doge.

That’s exciting, sure, but it also makes it complicated to decide where and how to invest.

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See, The Motley Fool has a long-term picks-and-shovels strategy that could help you make money from the crypto market as a whole.

And here’s the kicker: The Motley Fool reckons this strategy will work even if the crypto market collapses tomorrow.

Find out how to play crypto the picks-and-shovels way: get The Motley Fool’s free report.

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