Investment in blockchain

Blockchain

Main article: Blockchain

Blockchain (global market)

Main article: Blockchain (global market)

Cryptocurrency ETFs

Main article: Cryptocurrency ETFs

2021

Russian blockchain company UseTech raised $11.3 million in investments

At the end of 2021, UseTech raised $11.3 million in investments. The funds received will go to the development of the next generation NFT infrastructure. Read more here.

Launch of Russia's first mutual fund for blockchain investments

The first fund for investment in blockchain has been launched in Russia. This became known on October 22, 2021. The BCS Digital Galaxy project was implemented by BCS World of Investments. Read more here.

EY invests $100 million in blockchain and crypto projects

At the end of May 2021, EY announced an investment of $100 million in research on blockchain technologies and crypto assets, as well as in the development of various blockchain-based solutions and services, including tools for analyzing smart contracts. Read more here.

2020: Venture capital investment in blockchain startups reaches $16 billion

In the period from 2012 to 2020. more than 3,000 deals with venture capital in the field of blockchain technologies were concluded around the world. In total, over 900 different venture investors, angels, incubators invested more than $16 billion in blockchain startups. This is evidenced by a report compiled by researchers at Cointelegraph Consulting and published in April 2021.

During the coronavirus pandemic COVID-19 venture capital investments , the blockchain industry was under serious economic pressure. In the period from 2019 to 2020. venture investments in blockchain decreased by 13%, while traditional venture investments increased by 18%. In general, the volume of venture investments in blockchain decreased from $3.17 billion in 2019 to $2.77 billion in 2020.

Venture capital investment in blockchain startups reaches $16 billion since 2012

In 2020, blockchain startups that specialize in decentralized finance (DeFi) attracted the most venture capital. More than 200 venture capital and hedge funds have invested about $20 billion in DeFi.

In 2020, blockchain projects that are developers of digital coins such as Avalanche (AVAX), Curv (CRV), DerivaDEX (DDX), Nervos Network (CKB) and Zilliqa (ZIL) were the most popular for venture capital deals.

Many blockchain-focused venture capital funds have outperformed traditional venture capital funds. While traditional funds had double-digit returns, some blockchain funds earned 10 times more. In addition to more impressive returns, they also have a low correlation with traditional asset classes.

One of the main reasons why venture capitalists will continue to show interest in blockchain projects in the next 10 years is liquidity. While traditional funds make a profit only after 5-10 years, digital coins provide liquidity from day one, attracting more attention to the blockchain industry.^[1]

2019

Investment in Chinese blockchain companies collapsed by 40%

In mid-January 2020, it became known that despite a very favorable attitude China towards - blockchain technology, investments in such startups decreased, and significantly - by 40% in 2019 compared to 2018. This is evidenced by data collected by analysts Rhino Data and the Chinese state media company Xinhua. The total investment in blockchain development in the country amounted to 24.4 billion yuan (approximately $3.6 billion) at the end of 2019.

In 2018, Chinese investment in blockchain was measured in record numbers. In 2019, both the volume of investments and the number of transactions (including venture capital) decreased - the last indicator decreased by 60% compared to 2018.

It became known that despite China's very favorable attitude towards blockchain technologies, investments in such startups decreased, and significantly - by 40% in 2019 compared to 2018

Despite this, in 2019 there is a steady increase in investments compared to 2017 both in terms of the amount and the number of transactions carried out. In 2017, only 168 blockchain-related investment transactions were registered, reaching 240 in 2019. Xinhua also disclosed the distribution of various types of investments. The study found that in 2019, 43.3% of investments went through funding rounds, such as the Series A funding round.

The Chinese blockchain community intensified mainly in the second half of the year, when several large mergers and acquisitions were concluded - possibly due to the announcement of the release of the digital yuan.

The fall in investment was an unexpected result, given that the Chinese government insists on the active use of blockchain technologies. It is assumed that research and experience of other companies should become the basis for the creation of a digital currency of the local central bank. Earlier, Chinese President Xi Jinping announced the need to introduce blockchain into the country's economy as one of the key technologies.^[2]

Investments in developers of corporate blockchain solutions soared by 62%

The volume of investments in developers of corporate-level blockchain technologies in 2019 reached $434 million, which is 62% more than a year earlier. This is evidenced by the data of the analytical company CB Insights, specializing in the study of the venture financing market.

In 2019, there was a surge in investor activity in the field of blockchain solutions for business. In 2018, investments here decreased, in 2017 there was growth, but it turned out to be not so significant compared to 2019. True, in 2019, a major deal took place, in which the Ripple cryptocurrency platform raised about $200 million.

The volume of investments in developers of blockchain technologies of the corporate level in 2019 reached $434 million, which is 62% more than a year earlier

Investments in blockchain projects that are not focused on the corporate sector in 2019 amounted to $2.36 billion, having decreased compared to the previous year, when the indicator was measured at almost $4 billion.

The study notes that most of the funds received by developers of corporate blockchain technologies do not come from venture investors. There are several reasons.

First, big tech companies like IBM and Accenture are independently developing enterprise blockchain solutions for their customers. According to analysts, in 2019, global spending on companies on blockchain products reached $2.9 billion.

Secondly, there are many large consortia that have created new enterprises. They are invariably funded by companies rather than venture investors, and investments are only transparent on a few occasions. An example is the insurance company B3i, supported by 18 global insurers, which in 2019 attracted more than $22 million in investments.

Another reason is that a startup specializing in a corporate blockchain system R3 is experiencing a serious decline due to a settlement with Ripple. This incident puts venture capital investors off the blockchain business solutions market.^[3]

2018

IDC: Global blockchain spending will double

By 2022, global spending on blockchain-related solutions will exceed $11.7 billion, IDC predicts in the summer of 2018. For the period from 2017 to 2022, average annual cost growth (CAGR) will reach 73.2%. This year, the total costs relative to 2017 will double and overcome the milestone of $1.5 billion. The region with the most significant investments in blockchain (over 36% of the total) will be the United States. Western Europe, China and the Asia-Pacific region will follow. Among the states with the most dynamically growing CAGR are Japan (+ 108.7%) and Canada (+ 86.7%).

Thanks to the development of blockchain by the banking industry in 2018, the financial sector will be the largest in terms of expenses ($552 million). Distribution and services will reach 379 million dollars, which will happen due to investments from retail and professional services. Production and extraction of resources will spend at least $334 million on blockchain-related solutions, significantly stimulating the directions of discrete and technological production.

In the United States, the largest blockchain investments are expected in the distribution of goods and services, and in the West, the To Europe countries of the Middle East and Africa, China in the Asia-Pacific region, the finance industry will come first. The industries with the fastest growth rate of costs will solution blockchain be process production (+ 78.8%), professional services (+ 77.7%) and the banking industry (+ 74.7%). Beyond these categories, the largest investments are expected in software blockchain platforms ON and for collateral. information security

The study points out that blockchain technologies can significantly transform asset management mechanisms, give much-needed transparency in the supply of goods and services, and revolutionize logistics.

Notably, while IDC experts predict the rapid development of the blockchain solutions market, their colleagues at Gartner recently published a study suggesting weak demand for the technology among companies. 77% of CIOs surveyed said there was no interest in blockchain. 43% of respondents do not plan to conduct any work and research in this area, although they follow the news in the market^[4].

IDC: Blockchain investment in Europe will grow 10 times

Investments in blockchain technology in Europe will grow from $400 million expected in 2018 to $3.5 billion in 2022, analyst firm IDC predicts. We are talking strictly about implementations of technology not related to cryptocurrencies, the Prime agency reported on July 24, 2018.

IDC's findings are based on data on investments in the technology and information on its use by companies from various regions.

In 2022, investments in blockchain in Europe will reach $3.5 billion. Illustration: mhlnews.com

Blockchain technology makes it possible to organize a decentralized database, the information of which is stored in a continuous sequential chain of blocks. Data is thus stored not on a single server, but on many different systems.

The implementation of the technology began with the cryptocurrency bitcoin, but there are many other possible options for using the blockchain. That is why the IDC study takes into account only those implementations of technology that have nothing to do with cryptocurrencies.

The concept of "blockchain" has long been inextricably linked with cryptocurrencies, but its use is not limited to them, and an increasing number of organizations - commercial and state - are exploring the possibility of using this technology for other needs, - said Roman Ginyatullin, information security expert at SEQ (formerly SEC Consult Services). - In principle, any industry that needs to preserve the integrity of critical information can find this technology for practical use.

IDC analysts predict that Europe will become the second largest investor in blockchain technology, with a CAGR of 80.2% in 2017-2022. According to 2018 data, the United States remains the leader in blockchain investment.

The European market is less flexible compared to other regions, as well as more differentiated in terms of business size. Yet... 2018 is the year of blockchain, and European companies are showing increasing interest in the technology, IDC said in a statement.

The most popular blockchain, according to experts, is in the financial sector - investments in technology at the end of 2018 will amount to $173 million (42% of the total investment). The banking sector and insurance are also showing great interest in blockchain. By 2022, blockchain is expected to be used most often to track compliance, verify and verify cross-border payments and settlements, and in asset and commodity management.^[5]

2017: SBI, Google and Overstock.com are most active in blockchain

Major investment funds of the world's largest corporations are directed to the development of blockchain mechanisms and technological tools for payment services and to improving the transaction system in the financial market, according to a report by CB Insights^[6][7].

According to statistics, the five most active investors included two banking giants - Citi and, Goldman Sachs American online retailer Overstock.com, a corporation Google Japanese and a financial holding, SBI Group which topped the rating. The holding finances 8 unique blockchain projects, including a payment service, Ripple Labs as well as a cryptocurrency exchange. Kraken

"Under the wing" of Google, experts counted six blockchain projects, the most famous of which are the Storj data warehouse, the LedgerX financial platform and the Veem online retail solution.

According to analysts, for incomplete 2017, blockchain received $4.12 billion, of which $2.9 billion was raised through ICO.

2016

Frost & Sullivan: Blockchain technology investment hits $500m a year

During 2016, about $500 million was invested in blockchain startups in the world. This is the highest figure in the history of such investments. In 2015, the volume of investments amounted to $495 million, in 2014 - $390 million, and in 2013 - $95 million^[8].

Thus, in total, since 2013, various blockchain solutions have raised about $1.5 billion in investments. During the same period, developers received more than 2.5 thousand patents for various technologies in this area. This conclusion was reached by analysts at Frost & Sullivan, who published the results of the Global Blockchain Startup Ecosystem 2017 study.

Of the large funds investing in blockchain, the study credits Union Square Ventures, Kleiner Perkins Caulfield & Byers, Andreesen Horowitz, CME Ventures, Goldman Sachs, Citi Ventures and Santander InnoVentures. At the same time, the emergence of funds that specialize only in blockchain investments, such as Boost VC, Digital Currency Group, Pantera Capital and Coinsilium, was recorded.

Blockchain startups by industry

Most blockchain startups, like investments in them, are in the IT industry. In total, 585 such startups were founded here, and most of them began to exist after 2013. In the financial industry, the number of blockchain startups at the moment reaches 429. In the field of consulting services related to blockchain, as well as in the field of Proof-of-Concept, there are 62 startups. Proof-of-Concept refers to the confirmation of the real operability of a particular concept for an enterprise.

The leader in the number of blockchain startups is the United States

According to Frost & Sullivan analysts, medicine, power and industry are extremely promising for the implementation of blockchain. There are about 100 blockchain startups in these areas.

In the power, blockchain can solve such problems as the organization of intelligent accounting systems at enterprises, as well as the creation of Peer-to-peer networks, where data transfer is carried out between equal participants. Energy corporations like RWE Group, Siemens and GE are already partnering with blockchain startups like Slock.it and LO3 Energy.

In healthcare, blockchain is useful for maintaining electronic medical archives and remote monitoring of patient conditions. The most notable companies in this area are HealthChain, BlockPharma, Hashed Health, Gem, Guardtime and Tierion.

Blockchain startups by country

Most blockchain startups currently exist in the United States and Great Britain - 341 and 136 companies, respectively. Thus, the United States accounts for 36.9% of all such startups in the world, and the UK - 14.8%.

Frost & Sullivan notes the favorable conditions created for the development of blockchain technologies in these countries. The relevant regulatory authorities that control this segment work there: the Financial Conduct Authority in the UK and the Tax Service and the New York State Financial Regulator (NYDFS) in the United States. In addition, these countries have development centers and support programs for blockchain startups. The example of the United States and Great Britain in this area is followed by Estonia and. Switzerland

The third place in the ranking is occupied by Canada, where 42 blockchain startups are based, which is 4.5% of their total in the world. On the fourth line is China 38 blockchain startups, that is, 4%, work there. This follows where Germany 26 startups are based, that is, 2.8%. About 280 startups do not have a specific location: their employees work remotely from different parts of the globe.

As for Russia, less than 0.5% of blockchain startups are located on its territory, which does not allow the country to enter even the top 20 leaders in this area. However, at the same time, Volostnov gives examples of Russian blockchain projects that should start in the near future. These include a system of control over the provision of medicines to the population, which is being developed by VEB together with the Government of the Novgorod Region. The expert also notes the introduction of blockchain in city services for servicing citizens and registering real estate. Rosreestr and the Moscow government are doing this.

Greenwich Associates: $1 billion invested in blockchain technology in 2016

Financial and technology companies invest $1 billion in the development of blockchain technology in 2016, trying to bring this technology to the capital markets, follows from a study by Greenwich Associates^[9]

About 135 respondents called the main obstacle to the widespread use of this technology "selfish interest" in outdated systems. Respondents to Greenwich Associates included bank executives, exchanges, asset managers funds and technology companies.

The financial sector will continue to have an impact on blockchain this year. Blockchain begins to prove that it meets its purpose in the capital markets, "Bloomberg quoted Richard Johnson, vice president for market structure and technology at Greenwich Associates.

"Currently, in 2016, there is a more rational discussion of blockchain, as market participants gain a deeper understanding of the technology and figure out how to better adapt it for financial markets," the study notes.

Notes