Since last year, a new trend gushed in the U.S. where the majority of Asian funds were showing active involvement in cryptocurrency investment. Some buzz states the importance of Asian funds enhancement is due to the solidity of cryptocurrency and blockchain in the American tech industry.
The Past Trend:
For a long time, the funds primarily from China were been in Silicon Valley. However, this news is hardly seen in the press, as most of their investment check sizes with assets under management (AUM) were smaller in size and frequency in comparison to American counterparts on an average.
These funds were then gradually found investing in subsequent stage rounds. Since at that moment they were not in competition with the top venture funds.
Also, in those early rounds being the startups, very few entrepreneurs were familiar with the funding team.
The Recent Trend:
The scenario today is different from past. The recent investment statistics show some ultimate trends. According to the analysis mentioned at Wall Street Journal.
Back in 2017, the investors in Asia directed 40 percent of the record $154 billion in overall venture financing, vs. American counterparts at 44 percent.
To be more precise, U.S. venture capital & tech firm deals, including Sequoia Capital or Andreessen Horowitz were around $67 billion in venture financing.
This was just moderately more than $61 billion which was directed by the Asian investors, such as Tencent and SoftBank.
Furthermore, Asia is grabbing money, and now U.S. funds have come to realize the massive growth of tech opportunity in China and Asia.
In 2017, deriving from the joint study by the Ministry of Science and Technology affiliate at China, the report shows that China held 164 unicorns, worth a combination of US$628.4 billion. While the recent U.S. reports show 132 unicorns as a whole.
Firms including Meituan Dianping (China’s Yelp) and Didi (China’s Uber) are some examples of large disruptive technology firms at China garnering huge valuations.
Several funds have hit the game ahead of competitors. Some instances are
- The big entrances of Y Combinator into China, announcing Qi Lu as their new office head. He was the former COO at Baidu.
- Earlier in 2018, Connie Chan responsible for leading the China network of Andreessen Horowitz got the promotion. He became the general partner and was the first to get the promotion from within the company.
Cryptocurrency and Blockchain Escorting Asian Funds West-East
Currently, cryptocurrency and blockchain are accelerating the cross-border activities. The global nature of cryptocurrency with blockchain has helped Asia, specifically China to lead the way.
- In the blockchain space, the firms in China set up more than 80% share in the field of mining compute power.
- However, Asia on an average drags the significant market share in the field of cryptocurrency trading.
The leading Cryptocurrency exchanges such as Binance, OKex, and Huobi, are operating under the Chinese teams.
The cryptocurrency phenomenon came into existence in Asia and U.S. at the same time. However, Asia was the leader to start this journey because of the favorable regulations. However, blockchain technology was in hail by the regulators throughout China, Japan and Korea.
Furthermore, the cryptocurrency and blockchain funds in China and Korea for the first time see an edge. They also had the access to proprietary details and relationships, along with the huge market that cryptocurrency firms.
Recently, the former CTO and co-founder of LinkedIn, Eric Ly initiated the blockchain company called Hub. In one conversation he mentioned the importance of Asia as a market stating:
It’s a region that is not to be dismissed, especially in the crypto world in terms of the interest and the activities that’s going on there. With more funds coming from China and Asia, and many crypto projects coming out of Asia, there will be more cross-border activities on both the investment as well as business development front.
They are leading the way as promptly they can and future might bring the enormous success considering blockchain technology. However, there are some flaws in the way that China is clearing with their strict laws towards cryptocurrency and illegal ICO trading.
Image Source: Blockchain