« back to reports
PitchBook Analyst Note: Crypto Quarterly Update

1Q 2018

PitchBook Analyst Note: Crypto Quarterly Update

March 8, 2018

PitchBook Analyst Note: Crypto Quarterly Update
Download report

PitchBook's latest research note covering crypto assets provides an update assessing financing sources for blockchain companies, on top of examining the effects of token sales on venture financing trends and a primer on consensus mechanisms.

Highlights include:

• Venture capital (VC) investment in blockchain startups increased considerably in 2017 to $911 million, an 88% jump from 2016. Nearly one-third of VC equity deals in 2017 were in “hybrid” or “protocol” companies that issue their own tokens, as opposed to “centralized” companies that have a more traditional structure.
• In December 2017 alone, investors poured 50% more into token sales (ICOs) than VCs invested in the space over the course of the entire year, and 3x more than all blockchain-related VC deals in 2016.
• While Ethereum will continue to be a nexus for development, other Turing-complete platforms like Cardano, RChain and others will also attract developers looking for increased scalability and security.
• In response to regulatory action on ICOs, early-stage investors will demand equity in addition to rights to discounts on tokens as a hedge against regulatory action on ICOs.