Venture capitalists (VCs) are investing in blockchain and digital currency firms at a rate expected to surpass last year’s record, even though the crypto industry is shivering in the cold winter.
According to PitchBook, VCs invested over $17.5 billion in these companies in the year’s first half. As a result, investment is on track to surpass the record $26.9 billion raised last year, which will make things better and happier for bitcoin and the company.
“The Current Market conditions – I don’t think they faze investors,” said Roderik van der Graf, founder of Hong Kong investment firm Lemniscap, which focuses on crypto and blockchain. “The capital available is massive.”
Venture Capital funds provide finance to startup businesses they consider promising development potential. Despite a harsh six months for the sector, the data indicates a strong belief in the future of cryptocurrency and blockchain technology.
VC Investments in Projects
Blow-ups at significant projects this year have seen bitcoin plummet about 65% from its November record of $69,000, with the overall value of the crypto market tumbling by two-thirds to $1 trillion.
Companies have shuddered as prices fall, with major U.S. exchange Coinbase and NFT platform OpenSea among those to lay off hundreds of workers.
Yet some VCs are shrugging off the gloom, with many deploying substantial war chests as their faith in the underlying tech behind crypto coins remains strong. However, not all investors are that optimistic in the face of cryptocurrency devastation.
The CEO of California-based crypto management company Wave Financial, David Siemer, claimed that there were indications of a correction from the extreme values of crypto enterprises in 2017. “This will get a lot worse – we’re a couple of months into this cycle. In the last cycle, the pain for those looking for funding was about 12 months.”
North America- the hotspot for VC deals
North America, long the hotspot for VC deals, has again been the focus of activity with about $11.4 billion in the six months to June, versus $15.6 billion for the whole of last year.
The numbers contrast with general VC activity in the United States, where deals fell to $144.2 billion in the first half from $158.2 billion in the same period last year as macro conditions and market turmoil chill investment.
Rumi Morales, director of investments at Digital Currency Group, a major U.S. crypto investor, said, “There used to be existential risk being in the space – that the whole industry was going to go away, it was all a dream. That is not the case anymore.”
Adopting crypto as an investment tool gained traction last year, with the use of blockchain gaining ground – even if the revolutionary changes from the technology promised to industries such as finance and commodities remain elusive.
