The era of Web 3.0? Venture capital funds have massively increased their investments in cryptocurrencies in 2021. The dramatic increase shows the new interest of large investors in diversified sectors.
In 2021, venture capital funds turned to cryptocurrencies
The increase is particularly clear year-on-year: venture capital investments in cryptocurrencies accounted for $2 billion in Q4 2020. In 2021 at the same time, this amounted to over $10 billion.
Year on year, the amount of money involved has increased by +500%:
Money invested in cryptocurrencies by venture capital funds
On a more distant scale, the progression is even clearer, according to Messari:
“In 2017, there wasn’t even a billion dollars of investment in the cryptocurrency sector from venture capitalists. In 2021, the industry received 11 times that amount in the last quarter alone. “
Another sign of growing interest is that the number of one-off investments has increased, although not as much as the total amount.
Reasons for this interest
Messari points to several reasons for this strong growth. On the one hand, the cryptocurrency sector is now particularly visible, so information spreads more naturally, even among the most reluctant. On the other hand, access to these investments has been greatly facilitated, and use cases have multiplied as the industry has grown:
3/ Even if an investor was hellbent on getting into crypto in 2017/2018, it was quite the challenge.
Today this backbone is much more mature. Some of the major developments include:
+Custody
+Exchanges
+Borrowing/Lending
+Investible Vehicles
+Research– Messari (@MessariCrypto) March 20, 2022
Messari reports that institutional investors traded 1.14 trillion crypto-currencies on the Coinbase platform in 2021. That’s 10 times more than they wagered in 2020.
This is a trend that has been noted throughout 2021, and it seems to be accelerating. Messari reports that 70-80% of institutional investors intend to invest in the sector “in the short term”. This shows the considerable weight that the cryptocurrency industry now has, and its particularly rapid growth in recent months.
