Venture capital funds have invested around $30 billion in cryptocurrency during 2021, which is more than in all previous years since the inception of crypto, market research firm PitchBook has found, citing transaction data.
According to the findings, crypto-related fintech firms globally raised $33.7 billion in 1,217 deals this year, nearly four times the previous yearly record of $8 billion, set in 2018.
“Investors are funding anything and everything,” PitchBook analyst Rob Le said, as quoted by Bloomberg.
Crypto has grown from merely a means of digital exchange into a varied industry with a wide range of projects. There are social media apps that turn celebrities into tokens, blockchain-based play-to-earn non-fungible token (NFT) games and entire NFT market places, which sell everything from collectibles to art pieces. And investors like Coinbase Ventures, Digital Currency Group and Polychain Capital are finding these projects increasingly worth investing in.
“We’ve moved beyond just digital gold. We’ve got financial services, art, gaming as a subcategory of NFTs, Web 3.0, decentralized social media, play-to-earn – all of that made investors think, ‘We don’t have enough exposure,’” according to Spencer Bogart from San Francisco-based Blockchain Capital LLC. His company is among the largest crypto investors, having financed over 120 crypto-related enterprises within the past eight years.
In the US alone, venture capital transactions quadrupled this year with some $7.2 billion in deals, PitchBook data shows.
Among the main fundraising winners of the year is crypto derivatives exchange FTX, which closed a $1 billion funding round in July that raised its valuation to $18 billion. Custodian New York Digital Investment Group also raised $1 billion in mid-December, and is now valued at more than $7 billion. Sky Mavis upped its valuation to $3 billion in October for the crypto-based online game, while Dapper Labs NFT platform pushed its valuation to $2.5 billion after raising $350 million from investors that included basketball legend Michael Jordan.
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