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Venture Capital Flows Weaken
Approval of Spot Ethereum ETF
According to The Block’s report, a team of analysts led by Nikolaos Panigirtzoglou at JPMorgan stated in a report last Thursday that despite the increased momentum in venture capital financing in the cryptocurrency sector this year, it still falls short compared to previous years. According to The Block’s data dashboard, the cryptocurrency industry has attracted $3.2 billion in venture capital investment so far this year, compared to over $4 billion during the same period last year.
However, with the rebound in the cryptocurrency market this year, more and more venture capital firms are raising or have raised new funds. For example, 1kx raised $75 million earlier this month to support early-stage development of cryptocurrency startups. It has been reported that Paradigm is raising $7.5 to $8.5 million for a new fund. Galaxy Digital, Hack VC, and Hivemind Capital have raised $100 million, $100 million, and $50 million, respectively, for their new funds. In addition, accelerator Alliance completed the first round of fundraising for its third fund in February, raising $10 million each from Brevan Howard Digital and Galaxy Digital, and plans to raise an additional $80 million by July.
While venture capital funding seems to be gradually recovering, cryptocurrency hedge funds appear to be more active this year, with their assets under management increasing sharply in the past six months, estimated to be around $20 billion.
In their report on Thursday, JPMorgan analysts reiterated that the probability of a spot Ethereum ETF getting approved in May is no more than 50%, but they expect the U.S. Securities and Exchange Commission to eventually approve such funds. The analysts pointed out:
