2018 is already breaking records for VC blockchain and crypto funding

Posted: 21 May 2018 12:09 pm
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Institutional interest in the space is growing rapidly, buoyed by crypto companies' own VC arms.

It's only May, and the total amount venture capital (VC) funds have invested in blockchain and cryptocurrency companies, even excluding ICOs, has already surpassed 2017's total, TechCrunch reports. Main street speculators might be pulling back from cryptocurrency hype, but institutional interest is growing rapidly.

Just five months in, the space has raised $1.3 billion in venture capital fundraising rounds, significantly more than any other year to date.

The numbers for this year are partly driven by the emergence of VC divisions among crypto companies themselves. Ripple recently created the Xpring VC fund to explore more use cases for the XRP coin, while Coinbase is aiming to become the Google of crypto by pursuing a similar VC and acquisition strategy.

The crypto mining giant Bitmain isn't letting its money sit idle either. It was one of the primary contributors to Circle's recent $110 million fundraising deal, which makes up a sizable portion of this year's $1.3 billion total to date.

The figures don't include ICOs either, which VC funds are also closely involved in, and there are doubtless plenty of other deals in the works that will boost the numbers further.

While many are looking at this ongoing surge of institutional interest as a potential driver of cryptocurrency prices, it might not necessarily pan out that way. Wide adoption of blockchain technology doesn't necessarily have anything to do with bitcoin, and fundraising efforts might be shifting towards US dollars, rather than the neo-traditional options of bitcoin or Ether.

At the same time, institutional interest might be driving some demand for the primary cryptocurrencies. Even as volumes on retail cryptocurrency exchanges slump, over the counter (OTC) cryptocurrency services are enjoying soaring demand from institutions and high net-worth individuals.

With institutions moving in, the "make everyone rich quick" phase of cryptocurrency might be drawing to a close and shifting to the usual "make the rich richer quick" status quo.

Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VEN, XLM, BTC and NANO.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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