2021 became a record year for the volume of venture capital investments in cryptocurrency and blockchain. The bulk of investment comes from the United States.
According to analytical research CB Insights, 2021 was a record year for crypto startups, especially in the United States. According to the data aggregated, US-based crypto and blockchain startups attracted more venture capital investments for the first time in four years than their Asian competitors due to the ban on cryptocurrencies and mining in China, which came into force in the summer of 2021. After the ban was imposed, venture capital investments in cryptocurrencies and blockchain in China were reduced to zero. Speaking to Bloomberg, CB Insights analyst, Chris Bendtsen, said that the data has shown that there were next to “no deals in China” as the companies have moved to places such as Hong Kong, India, and Singapore.
Although the investment market in China dried up, the report notes that global venture capital investment in crypto and blockchain startups grew more than 6-fold since 2020. In 2021, venture capital investments totaled $21.3 billion, while in 2020 it was only $3.1 billion.
The bulk of venture capital investments came from US investors. They invested $10.9 billion and made 417 deals in this sector. This is 7 times more than in 2020.
Coinbase Ventures was the leader in investments in the United States. It closed 24 deals in the third quarter. CMT Digital and Polychain Capital tied for second with nine deals each, while Andreesen Horowitz, Digital Currency Group, and Jump Capital tied for fourth with eight deals apiece. The report also noted that crypto exchanges were the leading segment in Q3, raising nearly $2 billion in VC funding.
As noted in the report, the growth of crypto venture investments worldwide and in the US indicates that the crypto industry is becoming more popular.