Did you know that there were over 3,000 blockchain-based venture capital deals worldwide between 2012 and 2020? To date, Cointelegraph Consulting has produced the most comprehensive dataset of any venture capital firm on blockchain. The new 75-page report covers more than $16 billion invested by 928 different angels, VCs, incubators and companies, and is the most detailed analysis ever written in the blockchain venture capital industry.
Cointelegraph’s Blockchain Venture Capital Report features exclusive interviews with the most influential venture capital funds, including TRGC’s Etienne Van Cruz, #Hashed’s Jin Kang, Draper Goren Holm Fund’s Alon Goren, PNYX Ventures’ Stefan Wong, Rarestone Capital’s Kamron Miraftab, Framework Ventures’ Michael Anderson and Dash Investment Foundation’s Ryan Taylor.
Read the full report here.
The report consists of three main sections with information on start-ups, venture capitalists (limited partners) and investors (limited partners). The main points of the report are reproduced below.
The most popular bitcoin projects in 2020 include blockchain VC deals: Avalanche (AVAX), Kriv (CRV), DerivaDEX (DDX), Nervos Network (CKB) and Zilliqa (ZIL), to name a few.
Many blockchain venture capital funds have outperformed traditional venture capital funds. While traditional funds have earned double-digit returns, several blockchain venture capital funds have earned tenfold of that. In addition to stunning returns, blockchain-focused venture capital funds also have a low correlation to traditional asset classes.
For example, the correlation of the BCAP Blockchain Capital token with the stock market indices was between 0.00 and 0.14. The diversification potential for investors interested in venture capital is clear.
Venture capital investments in blockchain manufacturing came under severe economic pressure during COWID-19. Between 2019 and 2020, VC investment in blockchain is down 13%, while traditional VC investment is up 18%. Global blockchain VC investments dropped from $3.17 billion in 2019 to $2.77 billion in 2020.
In 2020, the hot trend for blockchain VC transactions is decentralized funding. More than 200 venture capital and hedge funds are betting on the future of more than 100 DeFi projects. More than $20 billion in capital is currently tied up in DeFi protocols.
To find out more about how to contact DeFi, read Cointelegraph Consulting’s definitive guide to DeFi here.
For companies in the Series A funding stage and beyond, the price-to-sales ratio (P/S), price-to-book ratio (P/B) and price-to-earnings-per-share ratio (P/E) are commonly used benchmark multiples for valuing direct investments in blockchain. The valuations of some private cryptocurrency companies are astronomically higher than FANG stocks. For example, a cryptocurrency company raised capital with a P/E ratio of 110.
By comparison : Apple’s P/E ratio was around 24 at the time of the coronavirus, but peaked at 41.93 in December 2020. But in a way, it’s comparing apples to oranges. However, the fact that venture capitalists are funding startups at record-breaking multiples means that these investors have to generate more capital than they received – and in a highly volatile environment.
Read the full report to find out which sectors VPs think will be hot in 2021. The report also looks at the tax implications of private investment in blockchains in different countries, how to perform discounted cash flow analysis for exchanges going public, such as Coinbase or Kraken, and the benefits and risks associated with tokenizing a fund’s shares.
Cointelegraph Consulting provides customized research on digital assets and distributed ledger technology. Our services include educational seminars, in-depth written reports, and advice on blockchain implementation strategies for businesses.
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