Venture Investments in the Crypto and Blockchain Sectors Are Rising
In 2021, venture investments in the crypto and blockchain industry reached an unprecedented amount. Following the quotes of leading assets, the shares of cryptocurrency-related public companies overwhelmingly demonstrated impressive returns throughout the year. Taking Galaxy Digital Research and The Block Research as sources, we have the following data: Venture investments in the blockchain and crypto industries exceeded $30 billion, and the volume of such investments, compared to 2020, exceeded 700%.
Thanks to venture investments, the market has attracted an enormous income. At the end of 2021, more than 60%, the most considerable percentage, was invested in recently created projects developing today. Many engaging opportunities seem to be promising, attracting big market players. Even though quite a lot has been invested in projects that have already confirmed their reliability and have maintained stable incomes, in the last three months of 2021, new contemporary projects have lured more than $10.5 billion. Concurrently, market giants Bitcoin and Ethereum updated record price peaks at $69,000 and $4,868, respectively.
Overall, transaction volumes are estimated in millions of dollars as the numbers do not just rise, they double and multiply. Comparatively, in 2020, only four deals for more than $100 million were made, and a year later, the number of such deals made up 69. This signals that the blockchain industry is tempting, and the volume of investments over the past year, particularly investments in startups, is growing. Ethereum stays the basis of DeFi, and therefore various alternative platforms like Solana, Polkadot, and Smart Balance Chain, are becoming increasingly famous.
NFT, Web3, and Metaverse
2021 was marked by the fast development of metaverses. There was also a boom in the NFT and Web3 industries. Web3 products, connected with digital identification, data management, and content monetization, attract more and more investors. The same pattern is in the sphere of decentralized social networks.
However, it wasn’t enough to shift investments from the sector of traditional services, such as trading, investment platforms, and crypto lending services.
As GameFi and NFT segments skyrocketed, demand for information storage solutions, like Arweave, also increased. The NFT market is considered to have potential because it provides content creators with prospects to earn on their works through tokens, digital works of art that can be collected or sold as something unique and individual. Last year, with 406 transactions, NFT and GameFi projects received about $5 billion. One more typical feature of 2020 was a so-called “unicorn” status. “Unicorn” is a term used in the venture capital industry to describe a privately held startup company with a value of over $1 billion. At least 65 companies of the crypto and blockchain industry have acquired such a level. For instance, the share of the OpenSea company in the total trading volume of NFT exceeded 90%. Founded in 2017, the OpenSea NFT marketplace is estimated at more than $13 billion, and the number of its active users has surpassed 1 million. Thus, OpenSea was called a unicorn. Similar growth is markable in mergers and acquisitions (M&A).
To Sum Up
The trends of the recent period illustrate that the above-mentioned spheres will become influential drivers of industry development soon.