Venture financing for startups for cryptocurrency and blockchain is set to break records in 2021. As Cointelegraph previously reported, crypto companies received more financing in Q1 2021 in Q1 2021 than in the whole of 2020.
In fact, the three tradable companies raised $ 1.1 billion in sponsors in the first quarter of 202, accounting for a third of the total funding for crypto and blockchain companies reported in 2018. Given the current potential for crypto, the appetite for corporate venture is. capital financing can resist. Appears on blockchain for a year.
The financing habit at the early stage also seems to be spreading to retail, with the number of decentralized barter offers regularly increasing. As such, the original IDO launch tokens are now among the best in the cryptocurrency area.
Blockchain Direct Investment Funding by the Numbers
In the first quarter of 2021, 129 crypto and blockchain startups received nearly $ 2.6 billion in funding, according to a Bloomberg report from data compiled by analyst firm CB Insights. This figure is already over $ 300 million in total funding for these companies for the whole of 2020.
Cryptocurrency wallet provider Blockchain.com, BlockFi lending studio and blockchain gaming studio Dapper Labs provided nearly half of the $ 2.6 billion in financing that startups in the industry received in the first quarter of 2021. In late March, Dapper Labs announced an investment in US dollars . . 305. One million dollars from sports stars and other celebrities among increasing sales of important NBA Top Shot tokens.
Since the advent of the cryptocurrency, venture capital funding for US crypto and blockchain startups has surpassed other regions since the advent of the cryptocurrency, according to a recent Blockchain venture capital report published by Cointelegraph Research. This trend continues despite the unstable market visibility in the country.
According to Jehan Chu, founder of Hong Kong-based company Kenetic Venture Capital, the US regulatory climate has done little to deter private equity funding for blockchain startups, he told Cointelegraph:
“There is nothing more compelling than peer pressure such as Michael Sailor and Elon Musk and a bunch of institutional money coming into the market. Brave investors should focus on or look at cryptocurrencies, otherwise they risk losing the biggest market opportunity in a generation. ”
The potential for huge profits continues to be the driving force behind increased equity investments in cryptocurrencies for both blockchain and mainstream private equity funds. In the recently published “Blockchain Venture Capital Report”, Cointelegraph Research found that blockchain private equity surpasses traditional private equity in one, three and five years.
In fact, the performance of direct investment in blockchain has largely not been related to the dominant asset class. This trend provides a form of guarantee for venture capital funds that want to diversify their portfolios early.
Xinshu Dong, partner in VC IOSG Ventures, told Cointelegraph: “Cryptocurrency is a very attractive trend, not only with unique growth potential, but also very promising, especially in the coming months. Recent purchases from US institutions. ”
Given the remarkable increase in initial financing of cryptocurrencies in the first quarter of 2021, the relationship between blockchain-focused venture financing and the overall market may reverse this trend. After a peak of about 2% during the bullish trend in 2017, blockchain private equity fell below 1% of the global venture capital market by the end of 2020.
This decline can be partly attributed to trends in the bear market after 2018 and the ongoing coronavirus epidemic. Blockchain-focused venture funding declined 13% between 2019 and 2020, while conventional equity financing increased by 18% over the same period, according to Cointelegraph Research data.
Driving force to increase cryptocurrency financing in 2021
Since its inception, the cryptocurrency landscape has been compared to the early days of the Internet market in the 1990s and early 2000s. As the Internet boom created sectors such as e-commerce and social media that emerged and would later emerge, the blockchain space has become touted as an incentive for innovations such as decentralized finance and the decentralized network.