Author: Boris Kustodiev

The state of VC crypto investments in 2021 continues to improve. According to ‘Blockchain Venture Capital Report’ published April 11:

  • Quote: ‘There are very few blockchain VC funds for retail investors, even though there is high demand.’;
  • Quote: ‘Dedicated blockchain VC funds have significantly outperformed the market and regular VC funds over the past seven years.’;
  • Quote: ‘For the most part, correlations between blockchain VC and stocks, bonds, and commodities have been in the 0.00–0.14 range.’;
  • Quote: ‘Blockchain VC investments decreased by 13% between 2019 and 2020, while traditional VC investment increased by 18%.’;
  • Quote: ‘The total amount invested in blockchain VC dropped from $3.17 billion in 2019 to $2.77 billion in 2020’;
  • Quote: ‘Out of 676 registered blockchain VC deals in 2020, over 100 of the projects were related to DeFi.’;
  • Quote: ‘While Asia is currently in the third position in terms of blockchain VC investment at 25.08% compared to 56.29% in North America, the trend may be reversing.’;
  • Quote: ‘one crypto company raised capital with a P/E ratio of 110. … Apple’s P/E ratio … reached a maximum of 41.93 in December 2020';
  • Quote: ‘historically, most of the investments in the crypto space happened with little to no VC involvement (82% of all investments to date), (in) 2020 … only 22% of investments had no VC involvement at all’.

To sum up: Past year crypto VCs have got larger and greedier taking more risks as markets get higher and sheep money is injected into the financial system by FRS.

It reminds me 2018 when we seen the same FOMO from those guys. I would, also, question several findings from this Report.

First, calling correlation ‘low’ just on a basis of prices co-directional movements observed during long time periods without factoring in price amplitude and trading volumes is highly misguiding in our industry. One sharp drop eats all investors profits and our market is know to closely follow NASDAQ during those spikes.

Second, the theory, that in 2020 more than 80% investments come into the industry from VCs only, disregards the massive surge of IDOs. That fact I believe slipped under the radars of this report’s authors.

Nonetheless, this piece deserves your attention.


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