2021 Q1 Cryptocurrency Market Investment and Financing Report: Surge in Financing Numbers, Multiple Data Points Reach Historical Highs

This article is an original piece by Chain Catcher, authored by Alyson and Echo, and edited by Gong Quanyu.

In the first quarter of 2021, the cryptocurrency market experienced explosive growth, with significant financing events in popular sectors such as DeFi and NFTs. More mainstream investment institutions, including Singapore's government investment fund, DST Global, and Tiger Global, began to enter the cryptocurrency market, and IDOs emerged as a financing option for many crypto projects.

Against this backdrop, Chain Catcher has organized and analyzed the investment and financing events in the cryptocurrency market for the first quarter of this year, summarizing the trends and key points as follows: As the bull market in the cryptocurrency market continues, the activity of investment institutions has rapidly increased, further fueling the excitement in the crypto market. According to incomplete statistics from Chain Catcher, there were a total of 255 investment and financing events in the global cryptocurrency market in the first quarter of this year (excluding IDOs), more than three times that of the same period last year.

In terms of investment amounts, the financing events in the first quarter of this year involved over $3.8 billion, with the highest financing amounts for projects such as Dapper Labs, Blockchain.com, BlockFi, NYDIG, and BitPanda, which raised $555 million, $420 million, $350 million, $200 million, and $170 million respectively, all with valuations exceeding $1 billion.

In terms of investment institutions, the top three investment institutions by the number of investments in the first quarter of this year were GBV (Genesis Block Ventures), AU21 Capital, and NGC Ventures, with 35, 29, and 27 investments respectively.

As a complement to institutional financing, IDO financing methods have also gained favor among more project parties this year, with over 70 projects raising funds on mainstream IDO platforms in the first quarter, including several projects like Radicle and Mask Network that raised over $20 million through IDOs.

Below is Chain Catcher's detailed organization and interpretation of the investment and financing situation in the first quarter of this year.

1. Overall Summary

According to incomplete statistics from Chain Catcher, there were a total of 255 investment and financing events in the global cryptocurrency market in the first quarter of this year, involving over $3.8 billion, with the number of institutions participating in financing exceeding 370, all of which are historical highs for a single quarter. In comparison, according to PANews statistics, there were a total of 434 financing events in the cryptocurrency market in 2020, involving $3.566 billion.

Looking at the timeline by week, the number of financing events has significantly increased almost every week since the beginning of the year, from about 10 events per week initially to around 30 events per week by the end of March, reflecting the growing interest of investment institutions in the cryptocurrency market.

In terms of financing sectors, the popular financing sectors in the first quarter of this year were DeFi, NFTs, Polkadot ecosystem, cryptocurrency infrastructure, and trading platforms, with DeFi-related financing events accounting for more than half of the total financing.

In terms of financing types, token financing accounted for the majority of all financing events, while equity financing accounted for a minority.

2. Investment Institution Landscape

With the significant increase in the number of financing events, the landscape of investment institutions is also changing. According to Chain Catcher statistics, the top three investment institutions by the number of investments in the first quarter of this year were GBV (Genesis Block Ventures), AU21 Capital, and NGC Ventures, with 35, 29, and 27 investments respectively. Other institutions that made more than 12 investments include CMS Holdings, LD Capital, Coinbase Ventures, Alameda Research, IOSG Ventures, Binance Labs, and Block Dream Fund (under OKEx).

Among them, GBV, AU21 Capital, and CMS Holdings, although established for a long time, have rapidly developed into investment institutions in the past six months and are very keen on investing in early-stage DeFi projects, with relatively low single investment amounts.

GBV is an investment institution under Genesis Block, established in 2017, primarily operating cryptocurrency OTC trading in Hong Kong. It received investment from Alameda Research and acquired OMG Network last December, after which it began to invest heavily in primary market projects.

AU21 Capital was founded by well-known KOL Bao Er Ye and former Huobi Global Vice President Kenzi Wan, and has recently made many investments in the Polkadot ecosystem.

CMS Holdings was founded in 2019 by Daniel Matuszewski, the former head of Circle Trade, an OTC trading platform of Circle, and is headquartered in Hong Kong, closely related to the SBF network.

At the same time, many cryptocurrency exchanges have accelerated their investment layouts, with nearly half of the investment events involving exchanges, including Coinbase, Binance, OKEx, gate.io, and ZB.

It is noteworthy that many leading cryptocurrency projects have also seen the involvement of several traditional financial giants in their financing, such as Singapore's government investment fund, DST Global, Tiger Global, Soros Fund, Morgan Stanley, and a16z, with Google Ventures also making multiple investments.

3. Emergence of Multiple Unicorns

In the first quarter of this year, the number of large financing events in the cryptocurrency market has also significantly increased, with many investment institutions heavily investing in leading cryptocurrency projects to enhance their ecosystem layout. According to incomplete statistics from Chain Catcher, there were 37 financing events exceeding $20 million, with 16 financing events exceeding $50 million, and 9 financing events exceeding $100 million, among which Blockchain.com and Dapper Labs completed two rounds of financing exceeding $100 million consecutively.

14 cryptocurrency companies with financing amounts exceeding $50 million

These large investments reflect that an increasing number of cryptocurrency enterprises' business models and development prospects have been recognized by mainstream investment institutions, while the landscape of various sectors in the cryptocurrency industry has begun to take shape, moving towards a broader market space with the support of investment institutions.

More specifically, the five projects with the highest financing amounts are Dapper Labs, Blockchain.com, BlockFi, NYDIG, and BitPanda, with financing amounts of $555 million, $420 million, $350 million, $200 million, and $170 million respectively, all with valuations exceeding $1 billion. Additionally, Chainalysis has also surpassed a valuation of $1 billion, becoming a unicorn in the cryptocurrency market. Below, Chain Catcher briefly introduces these companies.

Dapper Labs, founded in February 2018, is a blockchain game developer aiming to bring the advantages of decentralization to 1 billion consumers through the power of gaming. The company is also the developer of well-known games like NBA TOP SHOT and Cryptokitties, and officially launched the Flow blockchain at the beginning of this year, currently valued at $2.6 billion.

Blockchain.com, established in 2011, offers services including a block explorer, cryptocurrency wallet, exchange, and a series of solutions for institutions such as asset custody and lending. Its venture capital arm, Blockchain Ventures, has invested in dozens of projects including Securitize, Aave, and Near. In its latest financing round, Blockchain.com reached a valuation of $5.2 billion.

Chainalysis, founded in 2014, is a blockchain data analysis company that tracks cryptocurrencies, primarily providing Bitcoin transaction analysis software to cryptocurrency exchanges, international law enforcement agencies, and other clients to help them comply with regulations, assess risks, and identify illegal activities. According to public data, Chainalysis currently has over 50 clients and is valued at over $2 billion.

BlockFi, established in 2017, focuses on providing lending services to the cryptocurrency market and also offers cryptocurrency asset trading execution services for retail and institutional clients. It is reported that BlockFi currently manages over $15 billion in assets, and its user base has grown from 10,000 to 225,000 since the end of 2019. Currently, the company's monthly revenue exceeds $50 million, with a valuation of $3 billion.

Bitpanda, founded in 2014, is a cryptocurrency broker based in Austria and is a registered digital asset service provider with the Austrian Financial Market Authority and the French Financial Market Authority, holding a PSD2 (Revised Payment Services Directive) license. It is understood that Bitpanda currently has over 2 million users, supports over 50 digital assets, and is valued at $1.2 billion.

4. The Rise of IDOs

A unique phenomenon in this year's cryptocurrency financing market is that IDO financing has become the choice for more and more projects, directly raising funds from the public on platforms like Balancer, Polkastarter, and DAO Maker. Since most tokens participating in IDOs can achieve multiple returns, the enthusiasm of cryptocurrency market investors for participating in IDOs is very high.

According to incomplete statistics from Chain Catcher, at least 70 projects conducted IDOs on different platforms in the first quarter of this year, with Balancer having the highest participation amount and the lowest entry threshold, currently raising over $170 million across all platforms.

IDO is essentially a DeFi version of public fundraising for project parties, allowing them to raise funds directly from community groups, especially enabling early supporters of projects to gain more financial returns. At the same time, IDO platforms can review projects and help investors filter quality projects, thus becoming an important infrastructure in the cryptocurrency market.

Among the projects that launched IDOs in the first quarter of this year, Illuvium, Radicle, and Mask Network had the highest financing amounts, each exceeding $20 million.

Overall, the investment and financing events in the cryptocurrency market in the first quarter of this year created historical highs, giving rise to many innovative emerging cryptocurrency enterprises, injecting more confidence and resources into the cryptocurrency market, but the market bubble and risks may also be invisibly amplified, as many startup cryptocurrency enterprises are easily obtaining valuations in the tens of millions of dollars, becoming an enduring concern for the entire market.