Crypto Funds Morph Into Venture Capitalists Shunned in ICO Boom
January 30, 2019 – Bloomberg
The line is being blurred in the wake of the collapse of the initial coin offering market, where startups were bypassing traditional venture funding by selling tokens directly to investors. But with a regulatory crackdown raising the risk of forced refunds, and with coin prices plunging as much as 90 percent last year, many investors want out — allowing the funds to come in and make purchases for cents on the dollar.
Crypto Funds by Year of Launch
Number of crypto venture funds overtakes hedge funds
Source: Crypto Fund Research
About 125 venture funds that usually provide capital in exchange for an ownership stake were launched last year, compared with 115 hedge funds that primarily act as investors, the first time the number has exceeded the total investment partnerships in the embryonic sector, according to Crypto Fund Research.