For many, 2021 has been a year of economic recovery. Sectors that stalled in 2020 have gone on to recoup losses. Those that weathered the storm have seen further revenue increases. For the fintech sector, the situation remains steady on its upwards trajectory. Interest from the public is at an all-time high, and investments from venture capitalists are still going strong. In terms of investments in crypto and blockchain in 2021, it seems it will be a record-breaking year. Companies are benefiting from significant support, as consumer trust increases.
As a testament to the health of the sector and the abundant opportunities, let’s see some of this year’s most significant investments in crypto and blockchain so far.
Investments in crypto and blockchain 2021
2021 was off to a bumper start, with some $17 billion investments in crypto and blockchain startups. This broke all previous records and signified growing confidence and interest in the sector. Some $3 billion was invested into the industry during the first quarter, meaning the most significant chunk came during Q2.
When we look at the trend of venture capital investments in crypto and blockchain startups over the last five years, we can see that things peaked in 2018. In 2016, investment was under $1 billion, but two years later, it had reached $3.3 billion. This was likely because Bitcoin experienced a flurry of interest during the same year, with the price of a single coin reaching almost $20,000. But in 2019, it dropped by over $1 billion. Since then, it’s been gradually climbing each year and is expected to hit $2.6 billion by the end of 2021.
In 2021, Coinbase partner Circle raised more than $440 million in its most recent funding round. Stakeholders kept the terms of the deal under wraps leaving many wondering what is fueling such a high value.
Circle is a peer-to-peer payments specialist that was started in 2013. The app allows account holders to keep, send and receive fiat currencies and cryptocurrency. In 2018, they launched the USD Coin, a virtual currency backed by Etherum and pegged to the US dollar. Circle created the stable coin to help ensure the volatility of the market, according to the company. USDC has a circulation of $22 billion and has grown by 436% in 2021.
The cash injection will drive forward growth and allow them to expand into other areas of the market.
At the start of June, Solana Labs announced one of the biggest investments in crypto and blockchain. The company raised $314 million via a token sale. According to a press release, Solana will use the money to build a decentralized finance (DeFi) system on the Solana blockchain.
The private token sale was led by Polychain Capital and Andreessen Horowitz. It included the participation of other big names from the cryptocurrency venture capital world. It is one of the most significant token sales in history, with most falling below the $200 million mark. Solana has been tipped as an “Ethereum killer” as its blockchain processes transactions quicker and more cost-efficiently.
Solana CEO Anatoly Yakovenko said they hope to onboard a billion users shortly.
Another example of big investments in crypto and blockchain was Ledger. in June, Ledger announced they had raised some $380 million to help them make cryptocurrency more secure and accessible. Since launching in 2014, the company has sold over 3 million hardware wallets across 190 countries. They also claim to have 1.5 million monthly Ledger Live users.
The latest funding round was led by 10T and included investors such as Draper Associates, DCG, Cathay Innovation, and Felix Capital, amongst others. Ledger will use the money to build on its existing hardware portfolio and to launch new products. Additionally, they will expand the services offered by Ledger Live, integrate additional third-party services, and fine-tune their support for businesses. Ledger said they are also keen to explore the opportunities presented by NFTs, real estate, and “other forms of value that can be shifted onto the blockchain.”
However, their ultimate goal remains to allow more users to buy, sell, trade, borrow, and lend virtual currencies via Ledger Live.
Bitwise, the world’s biggest and most successful crypto index fund manager, announced $70 million in funding this year. This brings the overall value of the company to more than $500 million. Investor Elad Gil and Electric Capital led the 2021 round of funding. It featured additional support from big names in tech, blockchain, crypto, and even Wall Street.
Bitwise said they intend to use the money to “strengthen its balance sheet” and support up its team, business, and production sites.
“Five years from now, while some investors will still be trading crypto portfolios themselves, many long-term investors will want to rely on the same financial advisors, processes, and brokerages they use for every other asset class” said Bitwise CEO Hunter Horsley.
“Bitwise is focused on equipping investment professionals with the products, education, and relationships they need to steward crypto and blockchain investments on behalf of their clients and LPs over the long run. This new round of capital will help us substantially grow our organization, expand our offerings, and cement our position as the premier crypto partner for professional investors.”
If you dream of setting up your blockchain or cryptocurrency company, now is the time to realize it. As you can see there are more examples of significant investments in blockchain and crypto. The market is enjoying unprecedented confidence. If you require assistance setting up your company, tax matters, and compliance, Fast Offshore can help. While we aren’t tech experts, we are experts in corporate services within this sector. Contact us today for more information!
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