Source: Adobe/Dmitry Rukhlenko Established VC firms are now realizing that crypto is the next great wave of tech.
Investors will be focused largely on projects operating within the metaverse, Web 3, DeFi, NFT, and gaming sub-sectors.
Current metaverse-related projects need to improve the social aspect of their platforms before attracting the really big bucks.
One important question remains: does the increasing involvement of VC funds in crypto make it likelier that the SEC will tend to view cryptoassets as securities?
The nascent crypto industry is very dependent on funding. Not just the funding we’ve seen in the form of various coin offerings and private fundraising, but also the indirect funding that occurs whenever retail traders buy a cryptoasset and boost its price, thereby increasing the value of funds held by blockchain platforms and their developers.
The past few years have witnessed an evolution in crypto funding, however, with the initial coin offering (ICO) wave of 2017 and 2019 gradually giving way to more traditional venture capital (VC). And as the US Securities and Exchange Commission (SEC) continues its legal battle with Ripple , it’s highly likely that this trend will only deepen in 2022.
According to industry figures speaking with Cryptonews.com , more traditional VC firms and investment funds will turn towards crypto and blockchain this year, further pushing public token offerings into the margins. And they’ll be focused largely on projects operating within the metaverse , Web 3 , and gaming sub-sectors. More VCs venture into crypto
2021 may have been a great year for crypto in terms of rising prices and market activity, but it was also a record-breaking year as far as more traditional venture capital funding was concerned.
Data compiled by PitchBook shows that, over the course of 2021, venture capital funds invested around USD 30bn in crypto- and blockchain-related firms. This is more than four times the previous record total set in 2018, and it’s also more than all other years combined .
This breakthrough amount has set a new precedent and created a new model for the industry, with the USD 30bn total also surpassing the record amount of money raised by ICOs in 2018 (which was between USD 11bn and USD 22bn, depending on who you ask). And given that the SEC is suing Ripple for allegedly conducting an unregistered securities offering, 2022 is likely to see more projects looking to VC funds for investment. “Established VC firms are now realizing that crypto is the next great wave of tech, like the Internet itself and mobile beforehand. They must invest — they have no choice,” said Mark Jeffrey, General Partner at the Boolean Fund and Co-founder of Guardian Circle . Jeffrey suggests that a VC firm missing out on the next Google or Amazon or Facebook would be catastrophic, not least when they already missed out on Ethereum (ETH) ’s ICO, which will potentially prove to be one of the greatest investment opportunities in history.
“So 2022 will certainly see increased interest and investment at an accelerated pace,” he told Cryptonews.com .
Other figures and analysts working within the crypto sector agree that this year will bring an increase in traditional investment firms diving into crypto for the first time.
“Yes, we will see more traditional funds entering into the cryptoverse. Particularly I see that there will be more uptakes from family offices and sovereign wealth-related funds,” said Anndy Lian, the Chairman of the crypto exchange BigONE and the Chief Digital Advisor to the Mongolian Productivity Organization .
As a taster of the kind of entity we can expect to enter crypto fundraising this year, it’s worth remembering that none other than Japanese financial giant SoftBank invested in the Sandbox in early November. In fact, SoftBank also invested in Digital Currency Group around the same time, along with Alphabet ( Google ’s parent company) and the state-owned Singaporean fund GIC .
This is quite a wide range of different funding organizations, and it’s because a diverse pick of funds are getting involved in crypto that some analysts think, sooner or later, pretty much all major funds will have to be.
“In the mid-90’s, there were internet VCs. By 2000, virtually every VC was an internet VC. Crypto investing is on that same trajectory,” said Lou Kerner, the CEO of Blockchain Coinvestors Acq. Corp . Targets: Metaverse, gaming, NFTs, Web 3, and DeFi
So assuming that more traditional investment funds and firms will get involved in raising money for crypto, what kinds of projects will they mostly be […]
source Crypto Fundraising in 2022: More VC, Metaverse, Gaming, and Regulatory Questions
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