VEnture capital firms invested more money in crypto startups in 2021 than all previous years collectively, in a vote of confidence in the potential of the crypto economy and blockchain technology, reports Alex Thorn, head of enterprise-wide research for Galaxy Digital, in a recent paper.
More than $33 billion was poured into blockchain and crypto startups in 2021 by venture capitalists, more than two-thirds of which was spent on fundraising. Crypto-economy startups absorbed 5% of all venture capital last year, while Q4 crypto and blockchain valuations were 141% higher than the rest of the allocation areas venture capital.
Image sources: Galaxy Digital Research
Of the money poured into crypto, 41% went to companies that had services for investing, trading, or lending digital assets; second place went to NFT, DAO and Web4 companies with 17% of allocations. The space continues to grow from the bottom up, with 62% of managers who raised funds in 2020 also raising again in 2021, reflecting rapid growth and increased investor demand.
Preliminary data indicates that there are now over 500 venture capital firms in crypto and blockchain, and this appears to reflect a maturation within crypto, with many of the earliest ventures being founded between 2018 and 2020. when the crypto was bearish having grown and advanced. Of the fundraisers that took place last year, 69 exceeded $100 million and 43 companies increased their valuation above $1 billion, achieving unicorn status.
Thorn wrote, “The share of pre-seed stage transactions continues to decline on a relative basis; and there is more diversity in the types of businesses being created and products offered, a consequence of a growing set of use cases and market opportunities.
The Invesco, Galaxy, and Alerian Crypto Partnership
the Invesco Alerian Galaxy Crypto Economy ETF (SATO) invests in the crypto industry across a variety of crypto-related categories and invests across market capitalizations in both developed and emerging markets. By investing in a range of crypto assets, investors can capture the potential of the space while mitigating risk against a singular one-time exposure.
The fund seeks to track the Alerian Galaxy Global Cryptocurrency-Focused Blockchain Equity, Trusts and ETPs Index, an index divided into two different types of securities: digital asset companies that are engaged in cryptocurrency or mining, buying and enabling technologies of cryptocurrency. ; and exchange-traded products (ETPs) and over-the-counter private equity funds that are associated with cryptocurrency.
SATO does not invest directly in bitcoin, cryptocurrencies, crypto-assets, initial coin offerings or cryptocurrency futures, and it is not diversified. SATO has an expense ratio of 0.60%.
For investors looking for an opportunity to gain exposure to crypto growth, the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC) offers an investment in blockchain innovation making it all possible. The fund is based on the Alerian Galaxy Global Blockchain Equity, Trusts, and ETPs Index.
BLKC invests in companies that develop blockchains, mine cryptocurrencies, buy cryptocurrencies or even enabling technologies, exchange-traded products (ETPs), or cryptocurrency-related OTC private investment trusts. currencies.
The fund does not invest directly in cryptocurrencies or crypto-assets and does not invest in initial coin offerings or cryptocurrency futures. It carries an expense rate of 0.60%.
Both ETFs carry Galaxy Digital in their holdings.
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