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VC Investment in Blockchain Halved in September, Drops to a 6-Month Low

Despite a crypto bearish market,old-school venture capitalists’ interest in the blockchain space seems to show no immediate signs of slowing down, and both deal and dollar volume in the field are up globally in the third quarter of 2018. But the number fell off a cliff in September.


Q3 saw $1.64 billion USD invested across 162 deals for the blockchain industry, as against 75 deals in Q1 and 147 deals in Q2, according to incomplete data compiled by China’s data tracking site 01data.

China has been a driving force in growing the venture investment in blockchain and blockchain-adjacent startups. Chinese blockchain startups have raised more VC money in Q3 2018 than their North American counterparts did during that same period of time. Blockchain firms based in China have raised $1.24 billion USD across 118 deals, constituting 76.1% of the global total.

It’s worth noting that when the bitcoin mining giant Bitmain raised $400 million USD in a Pre-IPO round in August, this month witnessed the largest amount of money flowed in the blockchain ecosystem this year.

However, the upward trend stalled in September. Only 27 deals worth $1.14 million were completed by global blockchain startups, the lowest number since this March.

There are several factors contributing to the loss. The key factor is China’s financial authorities continue to crack down on crypto tradings.The key factor is that the People’s Bank of China, the Public Security Bureau and several other agencies issued a joint statement in late August , starkly warning to the public about criminals using blockchain concept to raise funds illegally. And Chinese tech giants including Baidu, Alibaba and Tencent terminate all crypto-related activities accordingly. Another factor is the cryptocurrency market is in a strong bearish bias, which may scare some traditional investment institutions away.

In fact, the ICO market also went downhill last month. According to Bloomberg, ICOs failed to surpass the $300 million fundraising mark for September 2018, hitting its lowest point since mid-2017.

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