crowdfunding

Breakdown of Investment in the Crypto Economy

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Autonomous NEXT analyzed the investment in the crypto economy from 2013 till June 2018. Our findings show the first wave of investment from traditional venture firms in Bitcoin associated companies was between 2013 and 2016, with $400-700 million annually. The second wave of investment from corporates into enterprise blockchain was between 2015 and 2017, with $250-400 million annually. The third wave of public crowdfunding flowed into ICOs, with an unprecedented rise in prices for crypto currencies, with $7 billion of investment going into the space, 4x greater than equity investment in crypto companies. Many ICOs formed to take advantage of the “gold rush” and created questions of quality and regulation for tokens

But nearly half of the $12B in funding raised in 2018 is EOS ($4.2B) and Telegram ($1.7B) hiding emerging weakness in the system.

Analysis of Crypto Funds by Inception & Strategy and Estimated AUM

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Autonomous NEXT has kept a running tally on the number of crypto funds within the space, as well as their respective estimated assets under management.  Our findings indicate that over 300 funds currently exist, most of which started in 2017 and 2018, with a variety of strategies including Venture, Trading, Quant & Artificial Intelligence, Fund of Funds, Indexes, Token Baskets, Credit and Ecosystem Funds; with the majority (56%) of total AUM controlled by liquid venture funds. The inception of 61 funds in the first half of 2018 means barriers to entry such as market volatility and significant start-up costs do not pose as significant deterrents to new entrants seeking exposure into the crypto space.

Trends in Initial Coin Offerings and Crowdfunding Volume

Autonomous Research has analysed the trend in Initial Coin Offerings (ICOs) as an unregulated means of financing public Blockchains.  ICOs have experienced significant growth in 2014-2016 with funding rising from $26 million to $222 million. Cryptocurrency Ethereum was responsible for the majority (73%) of total funding from its ICO in 2004, whereas theDAO lead with a majority (68%) in 2016. The number of notable ICOs also rose from 3 to 16 in this period.

Our second chart shows the 2015 breakdown of global crowdfunding activity. ICOs represent less than 1% of the $34 billion raised, with peer-to-peer funding making up a majority 74% of total funding. With the surge in financing of public blockchains, we expect ICOs to capture an increasing portion of crowdfunding volume.