Venture investors have funded many blockchain startups, despite the decline in cryptocurrency markets. Crypto projects have raised over $4 billion in Q2.
CNBC reports that venture capitalists don’t seem to be concerned about cryptocurrency’s volatile nature. This is especially true in light of the recent market price collapse. Bitcoin is currently trading at $33,000, hitting an all-time high (ATH) of over $63,000 in April. This is a decrease of more than 50% from the ATH. After reaching the May record, Ether’s prices also fell.
CB Insights’ data revealed that different blockchain companies received $4.38 Billion in total funds. This represents a more significant increase of over 50% compared to the Q1 2021 period and almost nine times as much as Q2 2020.
Circle, a leading fintech company, raised $440 million from VC investors in May. This was the most significant VC investment in the history of a blockchain-based company. Circle plans to become public by allying with Concord Acquisition Corp (a unique purpose acquisition company), and Concord Acquisition Corp. Circle will be valued at $4.5 million if the merger is successful.
Ledger was second, a company that makes hardware wallets. It raised $380 million. Pascal Gauthier (CEO) noted that the cryptocurrency industry is slowly growing and that institutional investors are becoming interested.
At the current pace, blockchain funding will break the previous year-end record – more than three times the amount raised back in 2018. A record year of blockchain financing is driven by growing consumer and institutional demand for cryptocurrencies. Despite short-term price volatility, VC companies are still bull-focused on the future of cryptocurrencies as a mainstream asset class and blockchain potential to make financial markets more efficient, accessible and secure.cb insights senior analyst Chris Bendtsen said
Crypto projects attract large investments
Both traditional VC funds and blockchain-focused funds have contributed to the record influx in funding for blockchain companies. Some asset managers create blockchain venture arms in order to finance both the early and late stages.
Andreessen Horowitz, a venture capital firm, announced in June that it had launched a cryptocurrency fund valued at $2.2 billion. According to the company’s website, the new fund will go to different blockchain and cryptocurrency startups.
Blockchain Capital raised $300 million during May. Participating companies included PayPal, Visa and hedge funds.
Recent Series B financing of $900 million was secured by FTX, the largest cryptocurrency derivatives platform. This boosted the company’s value to $18 billion.