Image: Cryptocurrency, by Marc Bruxelle, Shutterstock.com
Blockchain companies raised US$1.8 billion through 343 deals during the first half of 2018, a new record for venture capital (VC) investment in the sector that highlights soaring demand from VC firms, according to a new report[1] by blockchain VC firm Outlier Ventures.
The trend has been largely driven by the surge in VC “mega rounds” of over US$100 million. These include Bitmain’s US$400 million Series B round[2] in June that valued the company at a whooping US$12 billion. Bitmain plans to apply for an initial public offering (IPO) in Hong Kong in September. Circle, a mobile payments and cryptocurrency trading company, raised US$110 million[3] in May at a nearly US$3 billion valuation. Circle acquired[4] popular cryptocurrency trading platform Poloniex in February for reportedly US$400 million.
Another key trend this year is the surge in merger and acquisition (M&A) activity. US cryptocurrency trading company Coinbase has been among the most active, acquiring seven companies this year so far, namely Memo.ai, Cipher Browser, Earn.com, Paradex, Venovate, Digital Wealth and Keystone Capital, according to Crunchbase. Other notable M&A deals during the first half of 2018 include Tron’s acquisition of BitTorrent for US$126 million in last month, and Binance’s acquisition of mobile cryptocurrency wallet Trust Wallet.
The report also notes the rise of decentralized cryptocurrency exchanges. Idex, Bancor and ForkDelta, the top three decentralized exchanges for Ethereum ERC20 tokens, collectively hold 91% of the market but other smaller ones also exist such as Kyber, Airswap, and Radar Relay, which recently raised a US$10 million Series A. One of the main appeals of decentralized exchanges is that these do not hold customers’ funds, positions
