Investments to crypto projects grew sixfold in 2021
The latest research paper examines all the deals, trends, moves, and investment plans in 2021 across the blockchain landscape.
In the crypto world, the year 2021 was interesting. As a result of adoption, media coverage, and price action, Bitcoin (BTC) has hit all-time highs. All of the recent interest and coverage surrounding everything crypto has been extremely satisfying, including nonfungible tokens (NFTs), decentralized finance (DeFi), and even large publicly traded companies, such as MicroStrategy, holding serious amounts of BTC on their balance sheet. That’s what the industry looks like from the outside.
However, this does not happen on its own. Teams of people and projects are improving existing applications for crypto every day. They are attempting to become the next DeFi phenomenon, NFT phenomenon or solution to a legacy problem that can only be solved by blockchain.
A 12-page report shows insights from cryptocurrency investment activity, based on data from the Cointelegraph Research Terminal’s database of venture capital deals, mergers and acquisitions activity, investors and crypto companies in 2021.
This report offers valuable insights into trends over the past few years, as well as what VCs were focusing on in 2021.
Capital inflows determine the Impact of Blockchain evolution
Capital investment is an important aspect that is often overlooked in the next stages of the blockchain revolution, which are being built behind the scenes. VC can be provided by a variety of sources, including high-net-worth individuals (HNWI), family offices, institutions, funds, and even decentralized autonomous organizations (DAOs).
By knowing what is being built, who is behind it and where it is being built from, interested parties can get a better insight into the future of the blockchain industry than by reading online news articles about it afterward.
Risk capital flows into crypto and blockchain at ever increasing rate
Capital inflows and active deals reached unprecedented levels in 2021. A total of 838 deals were completed in 2020, totaling $4.9 billion. Over $30.5 billion was invested in capital projects in 2021, with 1349 deals.
Due to the global impact of COVID-19, mainstream organizations such as Visa, Mastercard, PayPal, and Nike are investing heavily in blockchain and digital asset sectors such as DeFi, infrastructure, and NFTs.
Around 65% of all individual deal activity was driven by the top ten most active VC funds in 2021. DeFi was favored by nine of the ten companies to invest in 2021, with the exception of Animoca Brands, which invested heavily in NFTs.
The second most invested sector was NFTs, and third place was shared between Web3 and Infrastructure. CeFi, interestingly enough, was the least invested sector. Only Alameda Research and Coinbase Ventures invested in the double-digit percentages of their overall activity.
Considering all individual investments in 2021, the majority of VC investment rounds were in Pre-Seed & Seed Rounds. However, these rounds did not gain the greatest capital funding compared to others. Series B, for example, had only 61 rounds yet garnered $6.8 billion. Post-Series B’s Expansion rounds, which include debt financing, strategic partnerships, and treasury diversification, had over 200 rounds and almost $10.27 billion in investments.
M&A deals followed suit in the world of crypto during 2021
There were large arrangements taking place in the Mergers and Acquisitions scenery in 2021. The significant amounts of acquisitions over consolidations in the business cycle phase of the blockchain business seems rational, as it has not achieved any genuine mature level yet.
While pretty much every arrangement on this rundown was of high significance, a few stand apart for their more noteworthy importance to the blockchain industry and the direction of market sectors in general. These include Mastercard acquiring CipherTrace, PayPal’s procurement of Curv, Visa obtaining Tink, and Nike buying RTFKT Studios.
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