- A new report shows that the cryptocurrency industry has received more funding in the first quarter of 2021 than it received in the whole of 2020.
- Three months into 2021, a total of $2.6 billion has been raised as seed for startups in the blockchain and cryptocurrency industry.
- To put that in perspective, crypto-based startups accumulated funding of $2.3 billion throughout 2020.
- In the first quarter of 2021, 129 firms have reaped the largesse of venture capitalists, with BlockFi, Blockchain.com, and Dapper Labs raising the largest chunk of the funds.
Although the cryptocurrency sector may still be in its formative years, it has attracted the attention of serious investors looking to back the next big startup.
These investors are drawn by the allure of cryptocurrencies’ rising prices and the increasing popularity of blockchain projects such as DeFi and NFTs.
In 2021, cryptocurrencies have shot through the roof to reach a total market capitalization of $1.9 trillion. In the first quarter of 2021, the cryptocurrency industry has received more funding than it did in 2020, with $2.6 billion already raised in contrast to the $2.3 billion raised in the whole of last year.
Q1 Already Bigger Than 2020
CB Insights, a business analytics firm, has reported that crypto-based funding in the first quarter of 2021 has already exceeded the entire amount raised in 2020.
A total of 129 crypto and blockchain-based startups have succeeded in raising the sum of $2.6 billion in funding just three months into 2021.
The amount raised by these firms significantly exceeds the $2.3 billion raised in 2020 in 341 deals. The stellar numbers reported in just the first quarter put 2021 on course to break the record as the year with the highest amount of funding generated for crypto-based startups.
At the moment, 2018 holds the record, having recorded a whopping $3.3 billion in funding for the cryptocurrency industry. In what appears to be a year of shattering records, 2021 is experiencing a boom in the number of consolidations with the number of crypto mergers and acquisitions on the rise.
On the Flipside
- Despite the boom, some hedge fund managers remain wary of digital currencies.
- Nicole Wirick, the president of Prosperity Wealth Strategies, has stated that the fund has no plan to add cryptocurrencies to client portfolios.
- Due to increasing pressure from clients, hedge funds and investment banks are beginning to incorporate cryptocurrencies for their clientele.
Dapper Labs, BlockFi, and Blockchain.com Raising A Huge Chunk Of VC Funding
A large portion of the $2.6 billion raised in the first quarter was accomplished by the trio of Dapper Labs, BlockFi, and Blockchain.com. Collectively, these firms have raised $1.1 billion already as venture capitalist firms buy into their visions.
Dapper Labs, the brains behind CryptoKitties and the widely successful NFT marketplace NBA Top Shot, has raised over $300 million from investors. Blockchain.com has brought in $120 million and $300 million in February and March, respectively.
Crypto lending firm BlockFi has also raised $350 million in the month of March, helping to make the first quarter of 2021 a memorable one that is fit for the history books.