The second quarter saw a record $4 billion in venture capital raised by cryptocurrency firms, amid a bumper crop of $30.8 billion in fintech deals generally, a 29% increase from the year before, according to business trend watcher CB Insights.
Also noted by CB Insights was hardware wallet maker Ledger’s $380 million funding in June; a $300 million round in April for custody firm Paxos (which, like Circle, also acts as the steward of stablecoins); Block.one’s $300 million funding round in May for its Bullish exchange; and Mexico City-based crypto exchange Bitso’s $250 million haul in May.
While bitcoin and other cryptocurrency prices have flattened in recent weeks, the size of crypto raises appears to be increasing so far in the third quarter, with FTX leading the charge.
“Q2’21 was the largest funding quarter on record,” the report said of fundraising overall, adding:
Sectors to watch
Crypto has brought about a new age in banking compliance, the report said. Blockchain analytics companies, which track transactions and aid regulators and law enforcement, are another hot area in terms of funding.
CB Insights also singled out crypto custody and infrastructure as sub-segments that were notable for their ability to raise money. In addition to the funding for Ledger and Paxos, San Francisco custody tech firm PolySign raised $53 million and London-based custody firm Copper raised $25 million.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.