Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
Login My Member Benefits Archives Research Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    ×
  • Subscribe
Enter stock ticker or keyword
×
5 Ways to Beat the Fed (and Crush Inflation)
Twitter
Tags: Cryptocurrency

Why Venture Capital Is Pouring $25 Billion Into These Cryptos

By David Zeiler, Associate Editor, Money Morning • @DavidGZeiler • March 23, 2022

Start the conversation

Comment on This Story Click here to cancel reply.

Or to contact Money Morning Customer Service, click here.

Your email address will not be published. Required fields are marked *

Some HTML is OK

When venture capitalists start throwing tens of billions of dollars at a particular thing, investors tend to take notice. Because it means that "thing" is on the cusp of exploding into a major area of growth with a potential wellspring of profits just waiting to be tapped.

And now, venture capitalists have their sights set on cryptocurrency, with more money invested in crypto and blockchain tech companies in 2021 than in all previous years combined.

Exactly how much depends on who you ask - estimates range from about $21 billion to as high as $33 billion. Analytics firm CB Insights put the number at $25.2 billion, a stunning 713% increase over the $3.1 billion invested in crypto startups in 2020 and more than five-times higher than the previous record of $4.7 billion set in 2018.

The number of VC deals in the crypto space also increased. Venture capitalists made 1,247 deals in 2021, about twice as many as the previous year.

It's hard to overestimate how much of a big deal it is to see such large sums of venture capital moving into crypto. VCs only bet on companies where they see the potential to make an exit with multiples of the amount they invested. And they only invest after doing extensive research.

All this tells us as investors that venture capitalists have anointed crypto and blockchain tech as the "Next Big Thing." The same thing happened in the late 1970s and early 1980s with the personal computer revolution, and in the late 1990s with the Internet. And you saw what happened there.

The venture capitalists are sending us a message: Crypto is next. And the earlier you invest, the bigger your returns are likely to be.

Now, let me show you where venture capitalists are placing their bets in crypto...

Sign up for SMS so you never miss special events, exclusive offers, and weekly bonus trades.

The Big Crypto Deals Just Keep Coming

Here are some of last year's biggest VC deals:

  • Crypto exchange FTX had a $900 million Series B round in July, giving it a valuation of $18 billion.
  • Crypto custodian New York Digital Investment Group (NYDIG) raised $1 billion in December, putting its valuation at $7 billion.
  • Forte Labs, which provides blockchain tech to video game companies, raised $725 million in a Series B round in November.
  • Crypto payments firm MoonPay raised $555 million in a Series A round in November to reach a $3.4 billion valuation.

Notice that most of the biggest VC crypto deals of 2021 happened close to the end of the year. That momentum has carried over into 2022:

  • Crypto custodian Fireblocks had a $550 million Series E round in January, bringing the company's valuation to $8 billion.
  • Helium, a Web3 crypto project aimed at building a decentralized wireless network to power Internet of Things devices, raised $200 million in a Series D round in February to reach a valuation of $1.2 billion.
  • MetaMask wallet maker ConsenSys raised $450 million in a Series D round earlier this month to reach a valuation of $7 billion.

Here's the thing you need to understand about these deals...

Retail investors used to have no choice but to wait for the most promising startups to have IPOs so they could buy the stock. And there's no doubt that most of the unicorns mentioned above will go public at some point.

But crypto is different. While a few crypto stocks are available to buy, most of the opportunity here is in buying the cryptocurrencies themselves.

What many don't realize is that not all the VC money is going into startups - some of it is going directly into crypto projects that have tokens anyone can buy today.

8 Cryptos That Venture Capitalists Have Singled Out

I've put together a list of some of the cryptocurrencies that have attracted VC investment. We're not necessarily recommending them - although we have recommended the majority on the list elsewhere - but we are providing this list to give you some investing ideas you can research on your own.

  1. Algorand (ALGO): Arrington Capital Management launched a $100 million fund in November with the goal of funding projects building on the Algorand blockchain.
  2. Polygon (MATIC): AU21 Capital invested $21 million in the Polygon Ecosystem Fund last June. Polygon is a Layer 2 scaling solution designed to work with the Ethereum (ETH) network.
  3. Helium (HNT): In a round led by VC giant Andreessen Horowitz last August, Helium raised $111 million to grow its "LongFi" wireless network aimed at serving the Internet of Things. In February, Tiger Global and FTX Ventures poured another $200 million into Helium in a Series D round.
  4. MobileCoin (MOB): This project raised $66 million in a Series B round last August from a group of VC firms that included Alameda Research, Coinbase Ventures, and Marc Benioff's TIME Ventures. MobileCoin's goal is to enable near-instant, privacy-protected payments on smartphones.
  5. Axie Infinity (AXS): Sky Mavis, the company behind the popular Axie Infinity metaverse game, raised $152 million in October in a Series B round led by Andreessen Horowitz.
  6. Balancer (BAL): Balancer raised $12 million in a round led by Three Arrows Capital and Pantera Capital in February of last year. Another $24.25 million followed in May, with that round led by Blockchain Capital. Balancer is an AMM (automated market maker) used to help provide DeFi liquidity.
  7. Solana (SOL): Multicoin Capital set up a $100 million fund last May to invest in various Web3 projects with a focus on those based on the Solana blockchain. Later that month, three funds pledged a total of $60 million to projects built on Solana in emerging markets such as Brazil, India, and Ukraine.
  8. Polkadot (DOT): VC firm Master Ventures launched a $30 million fund in September for the purpose of building projects for one of Polkadot's parachain slots. According to analytics firm Messari, Polkadot is the most widely held crypto among venture and hedge funds that invest in cryptocurrencies.

A lot of these coins are part of what we call the "other" crypto market - the tokens that aren't on everyone's radar, like Bitcoin and Ethereum, but still have incredible potential because of the tech they're connected to.

We've been calling these "microcurrencies," because you can often get them for pennies on the dollar compared to Bitcoin. But the returns are some of the highest we've ever seen, crushing both Bitcoin and the stock market.

I'm talking potential gains of 75 to one, 211 to one... even 5,567 to one in the same span as BTC. This new class of game-changing cryptos is set to skyrocket, and you can get all the details on them here...

Join the conversation. Click here to jump to comments…

David ZeilerDavid Zeiler

About the Author

Browse David's articles | View David's research services

David Zeiler, Associate Editor forĀ Money MorningĀ at Money Map Press,Ā has been a journalist for more than 35 years, including 18 spent atĀ The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving atĀ Money MorningĀ in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple forĀ The SunĀ in the mid-1990s, and had an Apple blog onĀ The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

… Read full bio

Login
guest
guest
0 Comments
Inline Feedbacks
View all comments


Latest News

May 27, 2023 • By Garrett Baldwin

postcards from the florida republic - may 27

May 26, 2023 • By Garrett Baldwin

Here's Your (Surprising) Best Bet in a U.S. Default

May 26, 2023 • By Shah Gilani

earnings
The Five Things You Need to Know Before Buying Any Stock
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Profit Takeover This Is VWAP Penny Hawk Trading Today Midday Momentum Pump Up the Close
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Night Trader Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Extreme Profit Hunters Profit Revolution Warlock's World Quantum Data Profits Live Trading Alliance Trade The Close Inside Money Trader Expiration Trader Flashpoint Trader Darknet Hyper Momentum Trader Alpha Accelerators Weekly Profit Cycles Brutus Alerts Resource Traders Alliance

Ā© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz