In Q2 2021, blockchain start-ups have emerged as the unsuspecting victor amid broad cryptocurrency price crashes, with funding for blockchain startups rising above $4 billion for the first time.
Data analytics firm CB Insights reported to CNBC that a record $4.38 billion was raised by blockchain companies. Fintech companies as a whole pulled in $30.8 billion.
The Q2 funding represented a 50% increase over the previous quarter, and was almost nine times over the same period of time in 2020.
Blockchain is the fundamental technology on which cryptocurrencies are typically built. Depending on how the blockchain is built, it can allow for other applications to be built on top of it, such as is seen with the Ethereum network.
At its most basic though, it is a decentralized series of digital ledgers that tracks transactions on that particular network, such as Bitcoin transactions. Because of the structure of the ledgers and the way the blocks overlap, it is naturally resistant to fraud as records are replicated across the entire network of global computers.
Payment and digital currency firm Circle brought in $440 million in investments, the largest amount of funds raised in the second quarter for blockchain start-ups, followed by Ledger, a company that develops hardware wallets for digital investments and currencies, at $380 million.
These record numbers go to show that crypto investors haven’t balked at the price drops in popular cryptocurrencies such as Bitcoin and ether, but are instead shifting to gain alternative exposure through companies that are creating the technology for cryptocurrencies and the networks they trade on.
“Blockchain’s record funding year is being driven by the rising consumer and institutional demand for cryptocurrencies,” Chris Bendtsen, senior analyst at CB Insights, told CNBC. “Despite short-term price volatility, VC firms are still bullish on crypto’s future as a mainstream asset class and blockchain’s potential to make financial markets more efficient, accessible, and secure.”
This article originally appeared on ETFTrends.com