Venture Capitalists Continue Substantial Blockchain Investments

By Landon Manning

Despite a slump in crypto asset prices during the so-called “crypto winter,” venture capitalists are continuing to pour massive amounts of funding into a variety of blockchain projects.

BeInCrypto reported its recent findings on blockchain investment, claiming that venture capitalists have exceeded expectations of investment into distributed ledger technology. Indeed, the site claimed that the first quarter of 2019 has already seen $335 million pouring into various blockchain startups from venture capitalist firms alone.

However, the data from 2019 so far has shown that it is unlikely to match 2018 in the total amount of funds raised for blockchain-based enterprises. Last year was a booming one for investment into the blockchain industry, with more than $3 billion raised from venture capital firms. Many of the largest investments went to crypto mining equipment, with Bitmain gathering over $1 billion itself, and smaller players, like Bitfury, still raking in over $80 million.

Still, at this rate, 2019 seems well on track to blow 2017 out of the water, showing that the dip in interest caused by the long-term bear market did not eliminate wider interest in the various applications of distributed ledger technology. As BeInCrypto reported, interest in speculation on crypto asset prices has dwindled, and investors now seem more interested in more diverse and longer-term investments.

MIT Technology Review also conducted research into this phenomenon, finding that one company has already secured more than $60 million in 2019 venture capital investments. Niraj Pant, a partner at the venture capital firm Polychain Capital, described some of the differences between this slump and previous ones in the greater fintech industry.

Pant claimed that in 2015, it “felt like everything was really dead, and we weren’t sure if the market would pick back up. Now it still feels like there’s still a lot of stuff going on.”

Institutional investors, such as hedge funds, are showing increased interest in blockchain startups, which signals a growth in trustworthiness and a sense of broader adoption trends. In addition to supporting a variety of new projects intended to capitalize on the same principles of distributed ledger technology, venture capitalists are also looking toward the possibilities of decentralized finance in the future.

“I think we will see blockchains scale in the next few years to allow mainstream consumer applcations [sic] to be built,” Fred Wilson of Union Square Ventures wrote on his blog. “But until then, DeFi [decentralized finance] is a good place to hang out.”

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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