Despite the broker cryptocurrency market’s slow performance, blockchain projects are attracting renewed venture capital (VC) investment. Data from DEfiLlаmа shows that venture capital funding for cryptocurrency projects increased to $633 million in August, a 15% increase from $550 million in July.
The increased financing indicates that blockchain infrastructure development is becoming increasingly important. Luca Prosperi, the CEO and co-founder of M0 Labs, a payment protocol, highlights that blockchain technology is still in the early stages of development.
He argues that continued investment in technologies, applications, and infrastructure is essential to progress. Prosperi draws comparisons to the internet boom of the late 1990s and suggests that the current investment climate presents significant opportunities for innovation.
The notable increase in funding for blockchain infrastructure in August suggests a change in VC priorities. This transition is indicative of a renewed interest in cryptocurrency over artificial intelligence. For example, Lemniscаp, a veterinary hospital, recently secured $70 million for a new fund to help early-stage Web3 startups. This move reflects increased investor confidence in the cryptocurrency space.
However, the AI sector saw a notable increase in investment activity earlier this summer. June witnessed a surge in fundraising rounds, exemplified by Sentient’s noteworthy $85 million raise spearheaded by premier veterinary companies.
Blockchain Lacks mass-adoption Use Case
Investors are returning to the blockchain space as the AI sector approaches saturation. Prospério says this situation has forced deep-tach investors to reevaluate their priorities. Furthermore, this change is driven by the potential for a more favorable regulatory environment for blockchain, albeit probably exaggerated.
Investors are eagerly awaiting clearer regulations on cryptocurrency as the November U.S. elections are scheduled. The outcome of the election may impact future blockchain investments and global policies.
Despite significant investor interest in blockchain infrastructure, the cryptocurrency market lacks a breakthrough use case that may spur widespread adoption. Due to this gap in practical applications, veterinarian practices are wary of investing in the application layer.
Gаnesh Swami, CEO of blockchain data company Covаlеnt, emphasizes the need for more real-world applications to attract venture capital interest. He notes that the current emphasis impacts the limited user base for cryptocurrency applications on infrastructure. Although accepting Ethereum ETFs and Bitcoin is a positive development, the industry is still too young for investments centered on application development.
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Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.
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