Crypto Venture Capital Funding to Rise This Year, Won't Hit Previous Highs: JPMorgan

3 days ago

Digital plus projects are progressively turning to community-driven platforms to rise money, the study said.

Jan 24, 2025, 9:02 a.m. UTC

Crypto task superior (VC) backing is expected to retrieve this twelvemonth arsenic regulatory clarity and much crypto-friendly policies look during the tenure of President Donald Trump, JPMorgan (JPM) said successful a probe study Wednesday.

The Wall Street slope noted that task backing for the manufacture has been subdued successful caller years. This whitethorn person been owed to enforcement actions by the U.S. Securities and Exchange Commission (SEC) and the clime of regulatory uncertainty during the erstwhile administration, analysts led by Nikolaos Panigirtzoglou wrote.

The start of the EU's Markets successful Crypto Assets (MiCA) regulations, which came into unit astatine the extremity of December, is expected to "further bolster VC engagement," the study said.

Still, the level of backing is improbable to lucifer erstwhile peaks seen successful 2021/22, JPMorgan said, arsenic crypto task superior firms look a fig of challenges.

Giants of accepted concern (TradFi) specified arsenic Blackrock (BLK) and Franklin Templeton are expanding their information successful the crypto market, and this leaves little marketplace stock for VC firms successful stablecoins, tokenization and decentralized finance (DeFi), the slope said.

Nascent crypto projects are avoiding ample token income to VCs and are progressively turning to community-driven platforms to rise money, the study noted.

High involvement rates besides contiguous a situation for VC funding, JPMorgan said.

The maturation of cryptocurrency exchange-traded money (ETF) products is "inducing a inclination towards passive investing," and this could beryllium diverting superior distant from VC firms, the study added.

Will Canny

Will Canny is an experienced marketplace newsman with a demonstrated past of moving successful the fiscal services industry. He's present covering the crypto bushed arsenic a concern newsman astatine CoinDesk. He owns much than $1,000 of SOL.