Blockchain And Crypto Deals Are Down Sharply In 2019

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The price of bitcoin has recovered pretty well from lows hit late last year. But investor enthusiasm for all things crypto and blockchain remains far below peaks scaled several quarters ago .
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so far in 2019, the tempo of private support for blockchain and crypto deals lags aggressively behind last year. The down trajectory applies to both initial coin offerings and venture rounds for companies in the space .
altogether, investors have put an estimated $ 3.38 billion to work in initial coin offerings and secret fund rounds for companies in 2019, according to Crunchbase datum. * At this pace, annual investment portends to be a divide of the 2018 investment sum of $ 12.86 billion .
The declines come as major cryptocurrencies continue to trade well below prior peaks, although they have rebounded from final year ’ sulfur lows. And new cryptocurrencies have failed to deliver breakout hits. Out of the approximately $ 250 billion in sum evaluation for the crypto space, approximately 70 percentage comes from bitcoin alone .
Below, we break out numbers for both investor-backed rounds and ICOs, looking at trendlines for investing totals and round counts .

Not A Popped Balloon, But Certainly A Deflated One

The stream crypto and blockchain support environment looks less like a pop bubble than a deflate one. Currencies are calm trading and startups are getting fund. There ’ s barely less money chasing the quad .
In the chart below, we look at total fund across both initial mint offerings and private financing rounds for crypto and blockchain-focused companies globally :

Cryptocurrencies hit their bubbliest highs around deep 2017 and early 2018. That ’ south when bitcoin passed the $ 20,000 bell ringer, and total crypto market cap peaked at around $ 700 billion. venture fund of blockchain-related startup was besides on a roll about then, buoyed by bullish memes about the technology ’ s game-changing potential.

This past December, by contrast, looks like the lowest point for the crypto space in the past match years, with total market cap polish to about $ 75 billion. Crypto bears, some of whom predicted an eventual bitcoin valuation of zero, were starting to look rather prescient .
now here we are in early on September, and neither the bull nor the extreme hold case appear to be winning out .

VCs Still Like Blockchain, But They Like It Less

In short, blockchain is still a thing. It ’ randomness equitable not the thing that everyone ’ s talking about .
That includes guess capitalists, many of whom have been blunt boosters of all things blockchain. As a group, they ’ ve been putting less money into the space of deep .
therefore far this class, investors have put about $ 2 billion into rounds for companies tied to crypto and blockchain engineering, not including ICOs. That ’ south on pace to come in well below the $ 4.65 billion match for all of 2018. We have more numbers in the chart below :

Some of the most big VCs active agent in the blockchain and crypto space have been cutting back in 2019. For exemplify, Andreessen Horowitz participated in 14 support rounds with an aggregate prize of closely $ 850 million in 2018, per Crunchbase data. thus far this year, the firm has backed five deals valued at a short over $ 75 million .
They ’ re not entirely. Digital Currency Group and Blockchain Capital, two of the most active investors, have besides cut back sharply in batch count and aggregate measure of rounds they ’ ve backed .
It besides should be noted that the numbers include companies for which crypto or blockchain is a component but not a core concenter of the occupation. For model, the largest crypto-related turn for 2019 is a $ 323 million Series E for Robinhood, which offers cryptocurrencies but is best-known as a commission rid stock trade app .
But there have been early boastfully rounds this year for companies more entirely focused on crypto.That includes a $ 200 million series A for Bithumb, a south Korean crypto exchange platform, and $ 100 million in Series C funding for Kraken, the San Francisco-based crypto trade supplier .

Little Punditry For Blockchain And Crypto Slowdown

then, the data speaks reasonably distinctly : Blockchain and crypto-related fund is down but by no means dead after the cryptocurrency bubble pop. What ’ mho miss, however, is much in the way of punditry regarding why things are playing out this room .
The blockchain and crypto camps, as aforementioned, are largely populated with extreme bulls and extreme bears. There are those who think bitcoin is the younger generation ’ s adaptation of aureate. And there are those who consider crypto the beget of all scams and blockchain the most over-hyped technology ever .
One possibility, laid out by Andreessen Horowitz, is that blockchain will present disappointments in its retentive borderland to widespread viability. The firm writes :
“ Blockchain computers are fresh types of computers where the singular capability is trust between users, developers, and the platform itself… In substitute for these modern capabilities, blockchain computers trade off other capabilities such as transaction scalability. This can lead people to dismiss them, in the lapp way people dismissed early smartphones because they traded off computing might and screen door size for portability and newly sensors. ”
personally, I ’ m not buying the firm ’ s comparison hera. No one very dissed the future of smartphones, even back in the somersault earphone earned run average. We equitable weren ’ thymine sure precisely when all the pieces – price, portability, lastingness, computing ability, etc. – would come together in a box that warranted mass borrowing .
Blockchain, by contrast, has some pretty hard-core doubters. And cryptocurrency, in especial, has some real pessimists among the worldly concern ’ mho wealthiest, including Warren Buffet, who compares bitcoin to rat poison squared .
That said, we ’ re still in early innings. And for immediately, it looks like neither the blockchain boosters nor the detractors have sealed a winning lawsuit.

Methodology

Crunchbase ’ s ICO data is not exhaustive but does appropriate broad trendlines for growth and contraction in ICO fund .
exemplification : Li-Anne Dias .

Stay up to date with late fund rounds, acquisitions, and more with the Crunchbase Daily .

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