According to data from financial data and software company PitchBook, venture capital (VC) funds invested around USD 30 billion in cryptocurrency in 2021, which is more than four times the amount recorded in the previous record year of 2018.
The largest recent crypto-related investment was a USD 1 billion funding round by crypto derivatives exchange FTX last July, followed by Custodian New York Digital Investment Group's USD 1 billion funding round in mid-December, a USD 725 million fundraising round by blockchain integration tool specialist Forte last November, and a USD 350 million funding round by NFT platform Dapper Labs last March.
According to a recent report in Bloomberg, Spencer Bogart, a general partner at Blockchain Capital, in San Francisco, said “We’ve moved beyond just digital gold. We’ve got financial services, art, gaming as a subcategory of NFTs, Web 3.0, decentralized social media, play-to-earn — all of that made investors think 'we don’t have enough exposure,'”
According to Bogart, the sudden rise of what many VC managers considered as niche industries, such as NFTs, demonstrated investors what they were missing out on.
“Investors are funding anything and everything,” according to Rob Le, a PitchBook analyst.
The latest news indicates that the cryptocurrency investment mania is likely to continue and perhaps even accelerate in 2022.
The newest venture fund from a crypto VC firm, Paradigm, has stated the debut of what is thought to be the world's most significant crypto-oriented fund, with $2.5 billion set aside for investments in the industry.
Paradign explained, "our conviction in these beliefs has only strengthened over the past three years." The firm will continue investing, via the new fund, "in the next generation of crypto companies and protocols," as well as the existing flagship fund "across all stages and geographies."
“This new fund and its size are reflective of crypto being the most exciting frontier in technology,” declared Paradigm.