Crypto and Blockchain Investments continue to grow in 2021
The Crypto Market in 2021 has seen its highs and lows with Bitcoin reaching its all time peak in June 2021 before the total market capitalization had to dip from $2.5 trillion to $1.18 trillion over a 45-day span due to environmental concerns generated from crypto mining. Although the bear market has been settling in, 2021 has continued to see an increasing amount of capital enter this fast-evolving space. Let’s take a closer look at the numbers for 2021 heading into the final quarter of the year and what lies ahead for 2022?
A Closer Look on 2021 Growth in Cryptocurrency Market
Based on the new report from Big Four accounting firm KPMG, the first six months of 2021 saw 548 investments activities, including venture capitals, private equities, and mergers and acquisitions in the blockchain and cryptocurrency sectors. The total value of investments during the first half of the year is $8.7 billion, already doubling the total value of 580 investment deals made during 2020, worth $4.3 billion.
This number would further increase to about $17 Billion with a hefty chunk of it coming from a single deal that saw a new cryptocurrency exchange called Bullish draw close to $10 billion in cash and digital assets following an initial injection by Block.one of $100 million, 164,000 BTC, and 20 million EOS tokens. In fact, just this deal alone would have been substantial to make 2021 the biggest year for venture capital investment in the crypto space, but if that wasn’t enough, the remaining $7.2 billion dollars would have equaled 2021 with 2018’s record of $7.4 billion raised, which is even more impressive considering that there are still five more months to go before the end of the year.
Other Notable Investment Rounds, include:
- A little over a month ago, Silicon Valley-based venture capital firm Andreessen Horowitz announced the launch of its $2.2 billion crypto fund.
- Fireblocks, an infrastructure provider for digital assets, revealed that it had been successful in raising $310 million in a Series D round of funding, thus raising the total valuation of the company to $2 Billion in the space of six months.
- Solana, a project that seeks to deliver a high level of scalability and transaction speed, also recently announced that it had completed a $314.15 million private token sale, making the nine-figure total the fourth largest fundraising event in the history of the crypto industry.
- Cryptocurrency exchange FTX recently closed a $900 million funding round, which saw a total of 60 participants, including Softbank, Sequoia Capital, Coinbase Ventures, Multicoin, VanEck and the Paul Tudor Jones family. As a result, the trading platform’s valuation has grown to $18 billion from $1.2 billion just a year ago, making it one of the largest cryptocurrency companies in the world.
- BlockFi, a New Jersey-based financial services company for crypto users managed to close its Series D funding round at a whopping $350 million in March this year, setting its value at $3 billion.
- Bakkt, a bitcoin futures exchange backed by Boston Consulting Group and Microsoft, went public via a merger in January 2021 was set at $2.1 billion, they received a further $207 million in cash and an additional $325 million from other investors, not to mention $50 million from Intercontinental Exchange.
- Indian crypto exchange CoinDCX announced that it has raised $90 million in a Series C funding round. The Mumbai-based startup will go down in history as India’s first crypto business to reach unicorn status following the investment round that was led by B Capital Ground as well as the participation of Block.one, Polychain, Jump Capital and Coinbase Ventures.
- Formerly known as Blockchain.info, Blockchain.com is a widely popular crypto wallet and exchange that has grown significantly since its early inception back in 2011. Boasting over $800 billion in crypto transactions to date, Blockchain.com raised $120 million in a funding round, bringing the platform’s value over $1 billion.
- After raising US$ 200 million from Softbank Latin America Fund, Brazilian cryptocurrency exchange Mercado Bitcoin became the country’s latest unicorn, the name given to technology companies worth more than US$ 1 billion. With a US$ 2.1 billion valuation, the company is also the first crypto unicorn in Brazil.
Since the year began, more than 50 cryptocurrency and blockchain-related projects have risen to the much-coveted unicorn status, with market analysts predicting more to come as mainstream adoption of crypto and blockchain increases. Investment inflows also don’t stop on the companies as the cryptocurrency itself has gained more adoption, with companies such as Visa, Paypal, Apple looking at ways to integrate it into the payment systems.
What lies ahead?
Cryptocurrency and Blockchain as a system has seen its popularity grow in 2021 and despite the pandemic the investments towards cryptocurrency are still flowing in. It certainly has grown from a system that people believe was a hype in 2020 to a system that is certainly our future and an investment that the institution simply couldn’t resist.
Jehan Chu, Managing Partner for Kenetic, a venture capital firm investing in blockchain companies, told Cointelegraph that the ongoing economic uncertainty with the pandemic and the crypto regulation has led to the institution investors having no choice but to invest in the space:
“Fortunately, blockchain technology and crypto have graduated from a carnival freakshow to an inevitable future, so confidence in the underlying companies is at an all-time high. Additionally, a generation of cheap money flowing from the U.S. printing press has concentrated into the hands of investors. There has never been so much capital and the traditional gates have been eroded by partisan politics and poor financial management.”
Despite the COVID-19 pandemic that has had the global economy in a sort of standstill over the last year and a half, reports suggest that global venture capital funding over the first half of 2021 has shattered all previous records, with the figure now standing at $288 billion. Therefore, as an increasingly digitized future draws closer and with the crypto regulation taking shape, it stands to reason that more players from the traditional finance space will continue to make their way into this cryptocurrency space, helping it to grow even further.
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