附近上门

While crypto certainly wasn鈥檛 new last year, it did enjoy a record-breaking 2021 in terms of newly minted unicorns and venture dollars invested into the space.

Venture funding in the crypto space hit more than $21 billion in 2021, far surpassing the $3.7 billion invested in 2020, according to 附近上门 numbers. That level of funding also helped birth more than 30 new unicorns鈥攃ompanies valued at $1 billion or more鈥攍ast year in the industry, about three quarters of all unicorns created in crypto.

Those who follow the industry do not expect to see a slowdown in 2022 as the financial exchanges鈥� ecosystems continue to get built out.

鈥淐rypto is one of the most exciting investment areas right now because in some ways the entire stack is being built simultaneously,鈥� said , CEO and partner of , which has invested in several crypto companies such as and . 鈥淔rom apps, to infrastructure, to protocols, we are seeing developer and entrepreneur activity across the board.鈥�

In a space stil as emerging as crypto, it can be hard to spot the next new thing 12 months away鈥攚ho had heard of DAOs at this time last year?鈥攂ut those in the industry do think there are several aspects of crypto worth watching concerning the future of venture investing in crypto.

Infrastructure and compliance

Just like any growing industry, as crypto gets larger, more regulatory compliance is needed to both foster consumer confidence and build a system of checks and balances for large companies and institutions orchestrating it.

According to numbers from , back in the first quarter of 2018, 80 percent of crypto transactions were driven by retail investors with a volume of $66 billion traded. Fast-forward to the first quarter of last year, which saw 72 percent of all transactions related to large institutional participants, and traded volume hitting $327 billion.

When numbers start to get that large and you start dealing with those types of financial institutions, a bigger watchful eye comes along.

鈥淚t used to be the rebels driving this, now it is large institutional players,鈥� said , a general partner at who invests in crypto infrastructure.

Companies that help give analysis of blockchain data and crypto transactions to institutions and governments like New York-based and Los Angeles-based , which helps manage nodes and payment rails, likely will continue to see interest from investors as compliance protocols are built out around crypto.

鈥淎nything that helps power the infrastructure that surrounds transactions in crypto,鈥� Siddiqui said.

Analytics

The other adjacent area that large institutions now dealing in crypto may look at are analytics platforms that help provide correlations between crypto and its performance to more traditional asset classes, said , co-founder and managing partner at , where he invests in crypto companies.

鈥淚 think you鈥檒l see different applications that give you an analytical perspective of how diversified an investor you are,鈥� he said. 鈥淚鈥檓 sure this is already on the road map for some of the bigger companies.鈥�

While crypto hedge funds and insurance companies already have built-in-house tools with similar capabilities, such analytics could come from companies more situated in the crypto space or even startups.

Siddiqui said a company like 鈥攚hich sits in Telstra Ventures鈥� portfolio鈥攃ould eventually get into that realm and others could also build out 鈥淏loomberg-like鈥� analytics.

Finally more clarity?

Of course, further investment in crypto hinges on one thing: clearer regulation.

This past year saw uncertainty hang over the industry at times as China made crypto transactions illegal and there was chatter of further government regulations in the U.S. Despite those clouds, more large institutional investors and traditional venture capital firms entered the space at a breakneck speed.

Investors anticipate 2022 could be the year regulations are made more clear, not just in the U.S. but globally, as more and more people look to transact in crypto.

鈥淚 do think you will聽 see more clarity across the globe,鈥� said , who recently announced the launch of , a $1.5 billion fund focused on investing in crypto infrastructure, blockchain protocols and virtual worlds.

鈥淚 think regulation is healthy,鈥� he said. 鈥淐larity is the key. You just can鈥檛 have people guessing what will happen next.鈥�

, a general partner at who invests in crypto on the consumer side, agreed more clarity could come from bodies such as the this year. He added companies in crypto such as FTX are doing a lot of education and outreach and it will be up to those in the space to collaborate with government bodies to come up with smart solutions to regulations in the industry.

鈥淚 think you need to take a very thoughtful approach to this,鈥� he said.

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