In Q2 2021, VC Funding Poured $6+ Billion into Digital Assets

Statistics from The Block Research reveal that in the second quarter of 2021, 497 blockchain-related venture deals took place, amounting to $6.2 billion in funding. This shows that private investors have begun to seriously enter the crypto markets, which is sure to have an interesting effect on how the industry develops moving forward.

Q2 2021 Crypto Funding Has Nearly Doubled Over Just One Quarter

John Dantoni (pseudonym Twan), a researcher at The Block, has analyzed investment data covering just over a year and has found an approximately 90% increase in venture funding Q/Q. The data also shows that private funding has nearly doubled within one quarter, as Q1 2021 saw around $3.2 billion in investments, and Q2 has seen $6.2 billion. 

Even more fascinating, is that this graph shows within the space of two years, crypto and blockchain projects have seen a 640% increase in private funding, as Q2 2019 only saw $835 million. The data also shows that the company to receive the greatest VC funding seen this year (and over the last few years), is Circle, which successfully raised $440 million and is set to go public in the near future.

The company raising the second-largest amount of money within Q2 this year was the hardware wallet firm Ledger, securing $380 million, although it will soon have stiff competition as Square and Jack Dorsey will be producing a rival product. Other notable companies are Paxos, a blockchain infrastructure company, which raised $300 million, and the crypto exchange Bitso, which raised $250 million (and incidentally became valued at $2.2 billion, giving it the highly coveted unicorn status).

Although not fully discussed within these statistics, Block.One, a tech and incubation firm, launched a crypto-based subsidiary, named Bullish Global within Q2, which currently has $10 billion in funding. It is likely this company was not captured within these statistics because a large amount of its funding came from Block.One itself, Bullish Global’s parent company, meaning the funding is less independent than others discussed. 

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Of the most notable venture capital firms cementing their position within the industry is Andreessen Horowitz (a16z), which has launched three separate crypto funds within relatively quick succession. In 2018, Andreessen Horowitz invested $163 million into Dfinity Foundation, the organization behind the infamous Internet Computer (ICP).

This project is known in the crypto sphere for publicly launching its coin at $460, getting listed on most major exchanges within one day, and instantly entering CoinMarketCap’s top 10 projects by market cap. However, this was short-lived, as the coin is now worth a modest $38.38.

The 2021 VC Crypto Landscape vs. 2017

To gain a better perspective on just how significant 2021’s private digital asset investments have been, it helps to take a look at the VC activity during 2017– the market’s last bull run. In the entirety of 2017, worldwide crypto and blockchain venture investments reached a total of around $950 million.

Contrast this with 2021, which has seen around $7 billion in private funding within Q1 and Q2 combined. This is a 636% increase compared to the last bull run– a staggering difference. This is a wildly positive sign for the digital asset space. Not only does it mean the industry is receiving more money, but it means that legitimate investors are taking digital assets with more seriousness than ever. 

In other words, it is a sign of maturation. It means that the technology is improving, the public image of the industry is becoming more welcoming, and with the Chinese government is losing its stronghold on crypto mining, the community is starting to look towards more fruitful means of sustaining itself. With this in mind, it would be unsurprising if the crypto market was able to continue breaking records with its VC funding numbers in the final two quarters of the year. 

What do you think has been the main driving force of the private funding within Q2? Let us know in the comments below!