According to the analysis provided by PitchBook at the request of Il Sole 24 Ore, in the period January-August 2021, the amount invested in the crypto economy at the global level by Venture Capital and Private Equity investors and by corporates through M&A activity reached € 15.7 billion.
This is the highest value ever reached in the industry since 2010 (the previous peak was recorded in 2018 with € 6.6 billion). The investment volume is even higher as PitchBook did not consider transactions financed with digital tokens.
The investments in the crypto economy have been mainly driven by Venture Capital firms that, with 940 deals, have invested globally approx. € 12.5 billion in the analysed period.
Private Equity investors and the M&A activity recorded lower values (respectively € 1 billion and € 2.2. billion). This is not surprising, as companies of the crypto economy are still small startups, apart from rare exceptions.
Focusing on Europe, investments in the first 8 months of 2021 reached € 5 billion. Of these, € 2.6 billion is the capital invested by Venture Capital firms, whilst the M&A activity contributed with € 2.2 billion of investments. The role of Private Equity investors in the European crypto economy is marginal.
Several reasons can justify these remarkable numbers.
Certainly, there is an increasing interest of US banks and institutional investors for crypto-assets and for various applications of blockchain technology (such as smart contracts or apps for decentralised finance, which allow to disintermediate transactions and to lower costs).
Ethereum is probably the most suitable platform for such applications. In 2021, the global capitalisation and weight of Ethereum compared to all cryptocurrencies has increased from 14% to approx. 20% in 2021. Moreover, there is less fear regarding the regulatory risks, especially after the listing of Coinbase.
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For more info (in Italian): https://24plus.ilsole24ore.com/art/blockchain-2021-record-d-investimenti-societa-criptoeconomy-AEI5cwg