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Fintech Analyst Note: Blockchain

3Q 2017

Fintech Analyst Note: Blockchain

September 21, 2017

Fintech Analyst Note: Blockchain
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The latest fintech analyst note from PitchBook provides an update on trends in initial coin offerings (ICOs) as well as venture investment in blockchain-related enterprises.

Key takeaways:

  • Regulatory statements in China and the US have yet to temper market enthusiasm for the red-hot cryptocurrency and ICO market. Regulatory action against secondary exchanges in China may put short-term downward pressure on an overheated market, but will ultimately prove bullish.
  • SEC recognition that some tokens are securities and some are not is a sensible approach that will encourage the best ideas to continue in a sandbox, while less-innovative projects will face more scrutiny.
  • VC investment in blockchain companies has remained relatively flat, even as the ICO market has exploded.
  • Only half of valuation step-ups in blockchain companies have outpaced the price increase of bitcoin in the same time period which doesn’t account for survivorship bias, i.e. only successful companies stick around long enough to raise additional funding.