The first quarter of 2021 saw a slight decline in cryptocurrency funding amounts, according to a report held by venture capital research firm PitchBook. In spite of the decline, investors remain upbeat about the future of cryptographic investments.
In total, Q1 funding dropped from $5.6 billion in 2020 to $5.2 billion this year. While this may come as a surprise to some, cryptocurrencies continue to remain attractive investments to many investors. In particular, investors in the United States, Japan, South Korea, and Singapore are the most optimistic and are rapidly investing in the industry.
Encouragingly, the decline in investment amounts was not due to waning interest, but rather because a number of the larger investments occur in the latter portion of the year. Because of this, some investors see the Q1 decline as an opportunity to buy in at an attractive rate before prices begin to climb in the second half of the year.
Furthermore, crypto-focused companies that raised investment in Q1 are well positioned to benefit from a future recovery. For instance, Raydiant Ox, which raised $100 million in January, is currently developing a blockchain-as-a-service platform that provides services for various industries such as banking, enterprise resource management, and the public sector. There are high expectations for this platform, with some investors even predicting that it will become the “go-to” platform for blockchain applications.
The decline in funding for Q1 is viewed by many investors as a minor setback. With crypto-focused companies continuing to attract investment and a number of exciting projects on the horizon that could benefit from this technology, investors are still optimistic about their future prospects in the crypto space. All in all, the decline in funding seen in the first quarter of 2021 appears to be nothing more than a minor blip in the grand scheme of things and it should be no cause for concern.
