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The top 10 VC investors in blockchain

February 27, 2019 View comments (2)
Assets recorded on a blockchain are legally considered personal property in Wyoming thanks to new state legislation passed earlier this month, pending gubernatorial approval. This further propels the slowly evolving pro-blockchain sentiment in the US legal system. In 2018, at least 17 states had bills either signed into law or under review regarding the legal recognition of digital assets recorded on blockchain, according to the National Conference of State Legislatures.

While the American legal system can be slow and complex, venture capital funds fly faster toward shaping the future. And prompted by Wyoming's recent legal advancement, we analyzed the top VC investors in the global blockchain space to understand how the money is flowing:
 
Topping the list is New York-based Digital Currency Group with 127 blockchain-related deals worldwide since its founding in 2015, according to PitchBook data.

With a portfolio containing Decentraland, a digital life simulation game, and the collectible cat-avatar game Cryptokitties, the firm is also investing in daily real-world use cases. This includes investments in Decent, a startup seeking to make healthcare more affordable and accessible in the US, and Filament, an IoT startup applying blockchain to industrial and engineering use cases.

Beyond DCG, there are numerous other high-profile investors making significant moves. San Francisco-based Blockchain Capital is also betting on this technology—coming in second with 57 deals since its 2013 inception.

Biggest VC deals

While blockchain can be used for a variety of real-world applications, its use in fintech as the foundation for cryptocurrency and asset trading is still king when it comes to VC-backed investments.
 
Topping the list of the largest US-based deals in the sector, Coinbase pulled in a massive $300 million Series E in October 2018 at a valuation of over $8 billion. Founded in 2012, the San Francisco-based company specializes in cryptocurrency trading and storage. Fellow cryptocurrency exchanges Bakkt and Basis also received the second- and fourth-largest deals, respectively; Basis, however, has since shuttered and returned all funding to investors due to regulatory issues. Both companies received nine-digit funding in 2018.

BlockTower Capital, a hedge fund investing entirely in cryptocurrencies and digital assets, pulled in $140 million in October 2018, making it the third largest deal. While not a VC-backed startup in the traditional sense, a substantial amount of the funding came from prominent venture capital names including Union Square Ventures and Andreessen Horowitz.

Moving forward, the implications of recent legal advancements, such as in Wyoming, suggest venture capital funds may start to shift away from an obsession in cryptocurrency exchanges and toward real-world use cases involving physical and intellectual property. Healthcare, IoT, gaming and industrial applications are just a few prominent sectors to benefit from recognition of digital assets and blockchain-based data being considered personal property in the eyes of the law.

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