As initial coin offerings (ICOs) begin to face increasing regulatory scrutiny, blockchain and cryptocurrency startups are beginning to turn towards more traditional forms of funding.
According to a recent report by Outlier Ventures, the total year over year growth of venture capital investments in the cryptocurrency industry surged a whopping 316% to $2.85 billion through three quarters of 2018. Up from $900 million in 2017.
The report reveals that venture capital is distributed across all stages and that the 119 deals disclosed in Q3 was the highest total of any quarter for the young industry. These investments continue to be driven by VCs within the Uned States.
“As we see the focus of early stage investment into tokens shift away from tech-savvy retail investors toward VCs, hedge funds and ultimately larger institutional investors, we’re seeing a large growth in new businesses and services enabling the larger institutional investors to enter the space,” said Aron Van Ammers, Founding Partner of Outlier Ventures. “Self-sovereignty means self-responsibility, and when your private keys are lost or stolen there is no broker to call. Institutional investors have a need to reduce that technical complexity and risk. New players solve that problem; from institutional-grade custody providers, to trading platforms offered by the financial incumbents.”
This data matches previous reports that showed total venture capital raised by blockchain and cryptocurrency startups having reached $3.8 billion in 2018, a three-fold increase over last year’s total. This total was raised across 384 deals with as many as 2,000 investors involved.
More: State of Blockchains Q3: The professionals have moved in with VC investments soaring to all-time high
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.