16 Takeaways From CoinTelegraph’s 2020 Blockchain Venture Capital Report
- Dedicated blockchain VC funds have significantly outperformed the market and regular VC funds over the past seven years.
- Blockchain venture capital amounts to less than 1% of the entire VC market. Down from the 2% achieved during the 2017 Bull Run
3. Blockchain venture capital funds exhibit low correlation with traditional markets correlations between blockchain VC and stocks, bonds, and commodities have been in the 0.00–0.14 range.
4. Blockchain VC investments decreased by 13% between 2019 and 2020, while traditional VC investment increased by 18%. The total amount invested in blockchain VC dropped from $3.17 billion in 2019 to $2.77 billion in 2020.
5. Tokenizing a VC fund and investing in tokenized equity enables LPs, GPs, and other qualified investors to exit their investment faster by liquidating it on the secondary market if the contract with the startup allows early exit
6. While historically, most of the investments in the crypto space happened with little to no VC involvement (82% of all investments to date), 2020 saw a significant shift in those numbers. Last year, only 22% of investments had no VC involvement at all, and the remaining 78% were equally split between crypto VC firms, regular VC firms and joint ventures between the two
8. blockchain VC investments decreased by 13% between 2019 and 2020, while traditional VC investment increased by 18%.
11. Although many blockchain projects between 2017 and 2019 used SAFT contracts, the trend is on the decline. In 2020, financial regulators in the U.S. started cracking down on startups using SAFT contracts.
12. The majority of blockchain investment deals have been in the seed round. Between 2012 and 2020, our dataset recorded 1448 deals in the seed round compared to 248 angel investor rounds and 378 Series A. Interestingly, only five companies have done a Round D or E including: Circle, Coinbase, High Fidelity, TradAir, and Robinhood
13. The majority (69.2%) of blockchain companies have only engaged in one funding round. However, there have been 38 blockchain companies with at least 5 funding rounds or more
15. According to the “Crypto Hedge Fund Report” by PricewaterhouseCoopers and Elwood, there are four types of crypto hedge fund strategies including discretionary long-only, discretionary long/short, quantitative and multi-strategy
Full report available here.
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