Without a doubt, the general resurgence of cryptos has sparked new moves in the industry ranging from decentralized finance (DeFi) to non-fungible tokens (NFTs).
These glowing sub-industries within the broader crypto scene have resulted in hundreds, if not thousands, of new startups – and venture capitalists are investing money in them like never before.
Crypto firms received more funding in the final quarter than they did in all of 2020. Startups raised $ 2.6 billion, according to CB Insights
– unfolded. (@cryptounfolded) April 2, 2021
According to a report by CB Insights, venture capital funds invested $ 2.6 billion in over 129 crypto-based startups in the first quarter of 2021. That makes up more than all of 2020, which saw $ 2.3 billion invested in 341 transactions. The increase was largely due to Bitcoin making new highs and attracting more corporate buyers and retail investors.
When institutional investors wanted to capitalize on the growing demand for Bitcoin investment solutions, crypto financial services company NYDIG raised $ 100 million through Morgan Stanley and Soros Fund.
With the digital art market in the spotlight, NBA Top Shot creators Dapper Labs and NFT Marketplace Open sea raised $ 305 million and $ 35 million in funding, respectively.
Will the Crypto Industry’s Recent Boon Last?
Cryptos got off to a good start to the year, but it is uncertain whether the industry’s rapid growth can be sustained. Things have calmed down a bit since March. For one, institutional demand declined significantly following the recent volatility in the crypto market, according to a report by CoinShares. The digital asset investment firm saw institutional inflows into bitcoin products decline nearly 60% in late March.
The The NFT room has dissolved since his speculative mania in February. According to Not fungibleThe average daily value of NFTs sold on marketplaces fell 85% between March 25 and April 1. Dapper Lab’s NBA Top Shot saw the total value of NFTs in circulation drop 50% as demand in the secondary market subsided.
These worrying signs will startle some venture capital funds, which can slow down investments across the crypto space.
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