With initial coin offerings (ICOs) facing increasing regulatory scrutiny, more and more funding for cryptocurrency and blockchain-related projects are pouring in from venture capitalists.
According to a report by Outlier Ventures, VC investments have surged 316% from a total of $900 million in 2017 to over $3.85 billion in 2018. VC is the now the dominant source of funding in the crypto world with investments across all funding stages.
A recent slate of 119 deals in the third quarter are the most ever reported.
Conversely, ICOs are down almost 74% from the $3.8 billion raised in the first quarter with September’s ICOs reaching a total of $150 million.
According to the report, without a recovery in Bitcoin’s price, the ICO model that swept 2017 is not likely to return.
Aron Van Ammers, founding partner of Outlier Ventures, says that the transition into a more VC-based investment pool has sparked the creation of more services catered to the less tech-savvy, more institutional grade client.
The report also singles out zero knowledge proofs as the hottest new tech on the crypto/blockchain space with initiatives from Ernst & Young and ING.
Developers say that zero-knowledge proof technology dramatically lowers barriers to blockchain adoption as ZKP allow organizations to transact on the same network as their competition but in complete privacy while running a network on Ethereum’s public blockchain. Enterprises will be able to leverage the power of Ethereum while maintaining secure private transactions.