The crypto world is at a crossroads. A recent panel discussion at a crypto event brought together a diverse group of experts – a venture capitalist, a representative from a major blockchain platform, and several angel investors – to dissect the changing dynamics of fundraising in this volatile space.
The moderator set the stage by pointing to a noticeable trend: a “crisis of narratives.” While fleeting trends and meme coins grab headlines, the industry seems to be lacking a cohesive long-term vision. This lack of direction, coupled with the aftermath of high-profile failures, has made venture capitalists wary, leading to a noticeable tightening of the purse strings.
This cautious approach from traditional funding sources has opened the door for a new breed of investors. Angel investors and smaller funds, less burdened by the need for massive returns, are stepping in to support promising projects. This shift is not just about available capital; it’s about a fundamental change in how projects are being evaluated and supported.
The panelists agreed that the old playbook of relying solely on big-name VCs is becoming outdated. Projects are realizing the importance of building strong communities and attracting a diverse range of investors who bring more than just money to the table. Strategic guidance, network access, and marketing expertise are now viewed as equally valuable, especially in a market saturated with projects vying for attention.
This new landscape demands adaptability and creativity from both sides of the table. Founders need to think beyond traditional fundraising rounds and explore alternative models, such as community-driven initiatives and tokenized equity. VCs, on the other hand, need to evolve from being just financiers to becoming active partners, offering tangible value beyond their initial investment.
The panel discussion served as a reminder that the crypto space while facing challenges, is also ripe for reinvention. The current climate, though turbulent, presents a unique opportunity to build a more sustainable and community-driven ecosystem where innovation thrives on shared vision and collaborative effort.
This event, held in Seoul on 2 September 2024, is a side event organized by ICP, NewTribe, and Cointelegraph in conjunction with the Korea Blockchain Week (KBW). Panelists include David from UFVentures, Shashi Shekhar from ICP, Red from PickelsDAO, Petr Martynov from Morningstar Ventures, and best-selling author Anndy Lian.
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
Established VC firms are now realizing that crypto is the next great wave of tech.
Investors will be focused largely on projects operating within the metaverse, Web 3, DeFi, NFT, and gaming sub-sectors.
Current metaverse-related projects need to improve the social aspect of their platforms before attracting the really big bucks.
One important question remains: does the increasing involvement of VC funds in crypto make it likelier that the SEC will tend to view cryptoassets as securities?
The nascent crypto industry is very dependent on funding. Not just the funding we’ve seen in the form of various coin offerings and private fundraising, but also the indirect funding that occurs whenever retail traders buy a cryptoasset and boost its price, thereby increasing the value of funds held by blockchain platforms and their developers.
The past few years have witnessed an evolution in crypto funding, however, with the initial coin offering (ICO) wave of 2017 and 2019 gradually giving way to more traditional venture capital (VC). And as the US Securities and Exchange Commission (SEC) continues its legal battle with Ripple, it’s highly likely that this trend will only deepen in 2022.
According to industry figures speaking with Cryptonews.com, more traditional VC firms and investment funds will turn towards crypto and blockchain this year, further pushing public token offerings into the margins. And they’ll be focused largely on projects operating within the metaverse, Web 3, and gaming sub-sectors.
More VCs venture into crypto
2021 may have been a great year for crypto in terms of rising prices and market activity, but it was also a record-breaking year as far as more traditional venture capital funding was concerned.
Data compiled by PitchBookshows that, over the course of 2021, venture capital funds invested around USD 30bn in crypto- and blockchain-related firms. This is more than four times the previous record total set in 2018, and it’s also more than all other years combined.
This breakthrough amount has set a new precedent and created a new model for the industry, with the USD 30bn total also surpassing the record amount of money raised by ICOs in 2018 (which was between USD 11bn and USD 22bn, depending on who you ask). And given that the SEC is suing Ripple for allegedly conducting an unregistered securities offering, 2022 is likely to see more projects looking to VC funds for investment.
“Established VC firms are now realizing that crypto is the next great wave of tech, like the Internet itself and mobile beforehand. They must invest — they have no choice,” said Mark Jeffrey, General Partner at the Boolean Fund and Co-founder of Guardian Circle.
Jeffrey suggests that a VC firm missing out on the next Google or Amazon or Facebook would be catastrophic, not least when they already missed out on Ethereum (ETH)’s ICO, which will potentially prove to be one of the greatest investment opportunities in history.
“So 2022 will certainly see increased interest and investment at an accelerated pace,” he told Cryptonews.com.
Other figures and analysts working within the crypto sector agree that this year will bring an increase in traditional investment firms diving into crypto for the first time.
“Yes, we will see more traditional funds entering into the cryptoverse. Particularly I see that there will be more uptakes from family offices and sovereign wealth-related funds,” said Anndy Lian, the Chairman of the crypto exchange BigONE and the Chief Digital Advisor to the Mongolian Productivity Organization.
As a taster of the kind of entity we can expect to enter crypto fundraising this year, it’s worth remembering that none other than Japanese financial giant SoftBankinvested in the Sandbox in early November. In fact, SoftBank also invested in Digital Currency Group around the same time, along with Alphabet (Google’s parent company) and the state-owned Singaporean fund GIC.
This is quite a wide range of different funding organizations, and it’s because a diverse pick of funds are getting involved in crypto that some analysts think, sooner or later, pretty much all major funds will have to be.
“In the mid-90’s, there were internet VCs. By 2000, virtually every VC was an internet VC. Crypto investing is on that same trajectory,” said Lou Kerner, the CEO of Blockchain Coinvestors Acq. Corp.
Targets: Metaverse, gaming, NFTs, Web 3, and DeFi
So assuming that more traditional investment funds and firms will get involved in raising money for crypto, what kinds of projects will they mostly be targeting?
“Metaverse is the hottest space at the moment, and that will likely extend through 2022 and beyond. But we’re still so early in crypto, that every area should see dramatic growth in investments, including gaming, layer 1 and layer 2 protocols, DeFi, and NFTs,” Kerner told Cryptonews.com.
The metaverse (whatever that will actually prove to be) is a theme mentioned by every commenter Cryptonews.com spoke with for the purposes of this article. This includes Mark Jeffrey, who despite suggesting that the metaverse will be the biggest target for funds in 2022, also argues that current metaverse-related projects need to improve the social aspect of their platforms before attracting the really big bucks.
“If you go into Decentraland, you see 500-1000 people — but none of them are talking to each other. They’re all wandering around, together, but alone, looking at scenery — and sure, buying land and avatar pieces — but that’s it,” he said.
Jeffrey predicts that such a model won’t sustain itself, unless it becomes more comprehensively social, with people able to spend hours interacting with each other online, as do on platforms such as Twitter and Facebook.
“But I do have hope that someone WILL crack the metaverse social medium, and one of these offerings will erupt. Once it does, NFT’s and crypto will create a massive opportunity for tens or hundreds of billions to be made,” he added.
Associated with the metaverse, gaming is likely to be another area that gets VC funds hot under the collar in 2022.
“The play-to-earn gaming sector also seems huge, as Axie Infinity has proven. Even though the gameplay is not great, it’s taken off in a big way,” said Jeffrey.
Another area that crops up, along with the metaverse, Web 3, gaming, and NFTs, is DeFi.
“The more specialized [funds] will go for specific verticals; if they are more into the finance sector, they will go for DeFi or investing in the next main chain if they are more tech-savvy,” predicted Anndy Lian.
The regulatory question
One important question remains: does the increasing involvement of VC funds in crypto make it likelier that the SEC will tend to view cryptoassets as securities? Because with funds buying the native tokens of platforms in the expectation that these platforms will grow (via the efforts of an enterprise) and, in turn, make said tokens more valuable, it really does seem as if the Howey test is being satisfied.
For Anndy Lian, this is a difficult question to answer, given that it depends on several variables.
“Personally, the increased number of investments into crypto does not necessarily mean that regulators will see the investments as securities. It depends on the nature of the project, where and how the VCs get them money from, and lastly where do they exercise their agreements,” he said.
For Mark Jeffrey, increased VC funding may incite the wrath of the SEC, although the latter is likely to come down hard on crypto anyway in 2022 and beyond.
“I do think the SEC will attack crypto in general and DeFi in particular in 2022. And [they] will have some success at curtailing activity in the US — but not worldwide,” he said, adding that crypto is growing too fast elsewhere in the world for American regulators to curb its growth too much.
Despite the fact that crypto can operate elsewhere than the US, the likely belligerence of the SEC and other American regulators may seem discouraging. However, Anndy Lian suggests the growing role of traditional VC funds may in fact soften the stance of the SEC and other regulators.
He said, “In fact, I would challenge that such an increase in investments would be good case studies and will act as a benchmarking tool for regulators to know how to further navigate in the crypto space, so as to find better solutions to protect the retail investors.”
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
4th October 2019, Singapore, Singapore – Well-aware that global success is not an accident, fast-growing trading platform BiKi.com is strategically and meticulously penetrating new markets and countries. With recent appointments of key personnel, the ambitious exchange is poised and ready to continue the implementation of their global expansion initiatives.
South Korea marks the fifth stop on their global agenda, with the BiKi team attending D.Fine at Korea Blockchain Week. This was followed by another global meet-up, which was co-hosted together with Chain Partners Inc., recognized as one of the most reputable firms in the Korean blockchain industry with steady media coverage, venture capital backing, a global network, and a record of rapid product engineering. Leveraging on their strong industry connections and vast network in Korea, Chain Partners CEO Charles Pyo and Head of Advisory Jackson Ra worked closely together with the BiKi team to produce a full-house turnout packed with esteemed VC panelists and industry specialists.
The staggering lineup of panelists, which included the biggest names in the Korean Blockchain VC space, was invited to join in the “Investment Insights” discussion. That such established Korean VC firms such as Block Crafters Capital, Block Patch, BlockTower Capital and RocketFuel were drawn to participate in the BiKi event, is a testament to the young exchange’s growing influence in the industry. The firms will also be partnering with BiKi to seek out high-potential project listings and increase the exchange’s database of users, while simultaneously boosting BiKi’s presence in Korea.
The topic “What’s to Come in 2020: Major Shifts in the Crypto Investment Space” garnered diverse responses from the insightful panel:
“THERE ARE TOO MANY BLOCKCHAIN PROTOCOLS OUT THERE AND MOST OF THEM HAVE ALREADY ‘PRINTED THE CASH’ TO SUSTAIN THEMSELVES THROUGH THE NEXT CYCLE. CURRENTLY RIGHT NOW THE MARKET PERSPECTIVE IS REALLY ‘HEAVY’ ON BITCOIN. WITH REGARDS TO THE RIGHT BLOCKCHAIN FOR PUTTING D’APPS ON TOP OF, IT SHOULD BE A FREE-FOR-ALL. ANYONE CAN CHOOSE WHAT’S BEST FOR THEM. AT THIS POINT I DON’T THINK IT REALLY MATTERS. D’APP DEVELOPERS SHOULD, HOWEVER, BE PROACTIVE TO BEING INTER-OPERABLE WHEN THERE IS A CLEAR WINNER. “ – JOONY KOO, FOUNDING MEMBER OF BLOCK CRAFTERS
“THE THING IS, THE COMMUNITY AROUND ETH IS STILL VERY STRONG AND WITH DEVCON IN OSAKA NEXT WEEK, I SEE THAT A LOT OF PEOPLE ARE STILL VERY INTERESTED IN WHAT’S BEING DISCUSSED THERE. ALL MY FRIENDS FROM NY ARE GOING TO OSAKA, SO IN THAT SENSE, THE POWER OF THE COMMUNITY IS VERY STRONG. BUT THAT BEING SAID, MY PERSONAL OPINION, NOT BLOCKTOWER’S OPINION, IS THAT ETH IS SORT OF CENTRALIZED IN A SENSE BECAUSE VITALIK IS CONSIDERED TO BE THE MANAGER BY ALMOST EVERYONE IN THE COMMUNITY. VITALIK IS NOT A HAVARD BUSINESS SCHOOL GRAD OR A MANAGER. PEOPLE THINK HE’S MANAGING BUT HE ISN’T FUNCTIONING AS A MANAGER. THE COMMUNITY IS STRONG BUT I HAVE CONCERNS ABOUT THE WAY THINGS WORK.” – STEVE LEE, HEAD OF ASIA FOR BLOCKTOWER CAPITAL
“THE MARKET HAS LEARNED THEIR LESSON – WE’RE NOT SO EASILY FOOLED ANYMORE BY SIMPLE STATEMENTS LIKE “WE ARE THE NEXT ETH”. IN THE COMING MONTHS WE SHOULD SEE SOMETHING SIGNIFICANT COMING OUT, AND I THINK BEFORE THE NEWS COMES OUT, A LOT OF OUR FRIENDS HERE WILL HAVE THAT IN OUR POCKETS.” – ETHAN NG, BIKI.COM SOUTHEAST ASIA CEO
“CHAIN PARTNERS IS LOOKING FORWARD TO 2020 AS WE AND OUR NETWORK AROUND US CONTINUE TO DEVELOP PRODUCTS, STRATEGIES, AND THE CRYPTO INVESTMENT ECOSYSTEM IN KOREA.” –CHARLES PYO, TECH ENTREPRENEUR AND CEO AND CO-FOUNDER OF CHAIN PARTNERS, EXPRESSING OPTIMISM ABOUT THE INDUSTRY
Meanwhile, Dennis Hui, BiKi Business Development Director, has headed over to the sixth global stop in Malta at Delta Summit, to present on BiKi’s augmented roles as a fourth-generation exchange, which is apart from being just a medium of exchange. This is followed by another meetup which will only include BiKi’s exclusive partners, as this time, the focus will solely be on cementing media, project and VC relationships in Malta.
Targeting growth expansion goals of 200 – 300%, the exchange is certainly living up to expectations. Next up on the agenda is Devcon in Osaka and Blockchain Life in Moscow, where the team will once again branch out to globalize the BiKi brand, and that includes organizing signature events at every global stop. From the Toronto Futurist VIP lunch, where industry luminaries such as Brock Pierce were in attendance, to the massive Ce La Vi afterparty in Singapore, BiKi’s global meetups are certainly events not to be missed!
About BiKi.com
Headquartered in Singapore, BiKi.com is a global cryptocurrency exchange ranked Top 20 on CoinMarketCap. BiKi.com provides a digital assets platform for trading more than 150 cryptocurrencies and 250 trading pairs. BiKi.com is focused on providing the safest, most stable and most effective cryptocurrency trading platform. 100% of the transaction fees are used in buyback and burning of platform token, BIKI. Since its official opening in August 2018, BiKi.com is considered one of the fastest-growing cryptocurrency exchanges in the world with an accumulated 1.5 million registered users, 130,000 daily active users, over 2,000 community partners, and 200,000 community members. BiKi.com has received investments from Huobi co-founder Du Jun, Genesis Capital Zhu Huai Yang, FBG Capital, ChainUP and others totaling approximately 10 million USD.
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
