Asia Falls Behind as US Takes the Lead in Crypto VC Deals

The US is the global leader in blockchain-related investment deals, with nearly three times the dollar amount transacted in deals there as in Europe during the third quarter of this year. Meanwhile, Asia has for the first time fallen behind the US by the number of crypto startups that raised capital, a new report has found.

According to the report, prepared by business intelligence firm CB Insights, the amount of capital raised by US-based blockchain-focused companies has never been higher, after having risen for five quarters in a row.

“US blockchain/crypto funding dollars hit nearly USD 3bn in Q3’21, rising for the fifth consecutive quarter and reaching an all-time quarterly high,” the report said.

This large amount of capital raised in the US over the past quarter represents an increase of more than 11x from the same quarter last year, when just USD 263m was raised, the report pointed out. Further, last quarter’s high number came after strong growth in both the first and second quarter of 2021, the data showed.

US blockchain funding in Q3 2021:

Meanwhile, the USD 3bn of capital that was transacted in deals connected to US-based crypto companies also dwarfed what was seen in other regions of the world for the quarter.

The whole of Asia, which includes China, India, and crypto hot spots like South Korea and Japan, saw deals worth just USD 1.4bn during the quarter, making up less than half the value of the deals in the US.

Europe, on its end, was even further behind, with USD 1.1bn worth of deals being closed in the crypto space in the third quarter – just over one-third of the dollar value of the US deals.

Looking at the number of deals also painted a similar picture, with 137 deals being closed in the quarter in the US, 65 in Asia, and 51 in Europe.

The number and dollar value of crypto-related deals in Q3 2021:

The report said that Coinbase Ventures was the most active investor in terms of the number of companies receiving backing from it.

During the third quarter, 24 companies received backing from Coinbase’s venture arm, while China-based LD Capital and Hong Kong-based Animoca Brands backed 11 companies each.

The report further added the total number of unicorns – meaning startups worth more than USD 1bn – in the crypto space has now reached 31, after 12 new unicorns were added during the third quarter of this year.

“More than half of new unicorns in Q3’21 came from the US. The US makes up about half of the total unicorn count, with 15,” the report said.

Commenting on the report’s findings to Bloomberg, Chris Bendsten, an analyst at CB Insights, said that the low number of deals in Asia – and the corresponding dollar value of those deals – is likely due to the ban on most things related to crypto in China.

“We’ve basically seen no deals in China,” Bendsten said, noting that activity is instead centered around crypto companies in Hong Kong, India, and Singapore.

But although China has decided to shut itself out of the new blockchain and crypto sector, the CB Insights analyst said that global growth in the space is far from slowing down.

The fourth quarter of 2021 is already set to become the biggest ever for crypto startup investing, the analyst was quoted as saying.