In a report by Reuters on April 17, the venture capital investments have so far raised $850 million for the startups of blockchain and cryptocurrency in 2019. This figure included resources from corporate enterprises as well. As a matter of fact, a whopping $6.5 million worth of investments into crypto startups, as well as blockchain, came from corporate venture capitals.
The 13 deals set the trajectory for another unbroken annual record. Bearing in mind that last year, a $2.4 billion investment in venture capital record was set. The $850 million figure in 2019 so far looks promising to beat last years’ mark before the year runs out.
The investments in venture capital had a wide range of sources, from manufacturers of crypto mining hardware to the various cryptocurrency trading platforms. Companies such as Microsoft corporations as well as the London Stock Exchange Group played a vital role in the abrupt increase experienced. This goes to show that the big firms are now seeing prospects in cryptocurrency and blockchain.
Investing in infrastructure but not in crypto itself
The Reuter report also made it known that key tech and finance organizations have made colossal investments in cryptocurrency and blockchain infrastructure in a bid to grow the crypto market, but apparently not investing the diverse cryptocurrencies themselves. They have only spent digital coins such as bitcoins but have carefully avoided any direct investment. The reason, he said, was due to the many regulatory concerns, price instability as well as some security-related issues.
Reuter noted a vital trend called tokenization, which basically entails that physical assets being in the form of blockchain-based token. The tends to bring more options to the table in terms of openness, liquidity and fractional ownership.
Richard Hay, UK head of fintech at law Linklaters said that organizations are trying to check if blockchain and its linked technologies can be used in ways that could cause a deeper change. “There are two dynamics at play; we can get something up and running and achieve cost savings, and also look longer term at ways of deploying the technology in more transformative ways,” he said.
Coinbase did not meet it’s 2018 target
Reuters further stated that in 2018, the estimated revenue generated by Coinbase, a high-flying company when it comes to buying and selling cryptocurrencies, staggered at $520 million. In October last year, the internal Coinbase documents set a target of $1.3 million, according to Bloomberg. The company, however, misses that mark by 60% assuming Reuters estimate is correct. It becomes obvious that the cryptocurrency bear market had a major influence on the diminished revenue of Coinbase in 2018. Holistically, there were crashes in a number of cryptocurrencies that were once highly-valued around late 2017 to early 2018.