Venture capitalists invested $30 billion in crypto companies in 2021 marking 450% growth compared to the previous year, as we are taking a closer look at our latest crypto news.
It doesn’t come as a surprise that an increasing number of corporate investors are looking to gain more exposure to crypto given that the asset class grew dramatically from its nascent state into a popular financial instrument. With corporate investors seeing other opportunities associated with cryptocurrencies, the reports show that such businesses see an inflow of venture capital funding in 2021 compared to the previous years. In 2020, venture capitalists invested about .
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5 billion in crypto companies but this figure surged in 2021 as about $30 billion was poured into the sector by venture capitalists.
The $30 billion investments from venture capitalists smashed an all-time high recorded in the previous years. CryptoQuant noted that most of the funds came in October after the US SEC approved the first Bitcoin futures ETF. A few crypto-related companies raised over $100 million from VCs including the developers of the Axie Infinity blockchain Game Sky Mavis. NYDIG topped the list of crypto companies that raised a huge amount of money from VCs with a $1 billion equity funding round led by Westcap and increased the company’s valuation to $7 billion.
The popular lending platform Celsius NEtwork increased its $400 million Series B funding round recorded in October to $750 million after the event got oversubscribed. While the equity firm WestCap led the NYDIG and Celsius network funding rounds, the other VC firms played a huge role as well. American venture capitalist Andreessen Horowitz participated in different funding rounds from crypto to web3 sectors and this became possible after announcing the launch of the $2.2 billion funds focused on digital assets alone.
Coinbase Ventures, Galaxy Digital Holdings, Binance Labs, and others, joined a few other crypto-related investments rounds. Most of the funds were used to enhance the operations of crypto companies in terms of employee recruitment as well as the launch of new products and services that first need the necessary regulatory approval.
As recently reported, The VC money is flowing in as cryptos have a blazing start of 2021 but we can still not say for sure whether the growth can be sustained. Things started settling down in March and the institutional demand dropped after the market volatility as per the reports from CoinShares. The digital asset investment company saw inflow into BTC products that dropped 60% in March. The NFT space was winding down since the mania back in February so according to NonFungible, the daily value of NFTs sold across marketplaces dropped by 85% between March 25 and April 1st.
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