Crypto Startup Investors Bypasses Asia and Focuses on the United States

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China’s crackdown on tech companies and cryptocurrencies is pushing venture capitalists to back companies in the United States rather than Asia, a scenario that has not happened since 2017, Bloomberg reported on Wednesday 1st. December.

“We haven’t seen virtually any deals in China,” CB Insights analyst Chris Bendsten told Bloomberg. “In Asia, the companies are really based in Hong Kong, India and Singapore.

Although China was once considered a crypto hotspot, the tech crackdown has negatively affected cryptocurrency and blockchain startups seeking capital, according to data from CB Insights. Beijing ended crypto mining and banking several months ago, then declared all crypto transactions illegal in September.

See also: China declares all cryptocurrencies, related transactions illegal

As the culture of crypto startups in China evaporated, investors around the world pulled out their checkbooks, with the fourth quarter of this year already on track to be the most important yet to invest money in. crypto startups, according to the report.

Venture capital investments in space have grown from $ 3.1 billion in 2020 to $ 21.3 billion through November 30. However, new transactions in China have fallen by more than 50% from last year, to a total of just 41 in 2021.

Funding for crypto and blockchain startups fell to $ 214 million, down by about a third – while in the United States, space investment jumped to $ 10.9 billion, or seven times more, Bloomberg reported.

Read more: Crackdown on big tech in China could hamper innovation

The appetite for investment in the world is a sign that the cryptocurrency and blockchain space is taking hold with the mainstream, Bendsten told the outlet. Venture capital, private equity and enterprise venture capital investors are “all believers now” and the trend is expected to stay the course in 2022, he added.

Lightspeed Venture Partners partner Amy Wu told Bloomberg the company is focused on becoming industry experts.

“Over the next few years, every Lightspeed partner will have a strong crypto mastery,” Wu said. “This will be the Internet of our generation. “

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