Major participants in the cryptocurrency space, like Binance, Coinbase, and Kraken, are constantly reevaluating their approaches to startup support. This change coincides with heightened regulatory scrutiny and a drop in venture capital funding for cryptocurrency in the market.
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These major players in the cryptocurrency space are shifting their focus on investments, looking into other markets, and giving priority to businesses that have concrete goods and revenue.
Venture Funding for Crypto Drops
As per a Bloomberg article, Coinbase Global, a prominent participant in the cryptocurrency space, has reported a decrease in its investment activities in the past few months.
This slowdown fits with a broader trend in the industry as corporate venture capital arms are pulling back on their investments in cryptocurrency businesses. Compared to the same period last year, total venture capital funding for cryptocurrency fell by 63% to $2 billion in the third quarter of this year.
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The venture capital division of Coinbase, Coinbase Ventures, has modified its investing approach to concentrate on firms situated outside of the US. The increased governmental scrutiny the cryptocurrency industry is under to is what is causing this move, as some multinational businesses are now excluding the US from their business plans.
In the last year, Coinbase Ventures has made over 50 investments in 15 different countries, with a particular emphasis on Australia, the UK, Singapore, India, and Singapore.
Over the previous year, the number of deals made by Kraken Exchange’s venture arm, Kraken Ventures, has decreased as well. However, the group is still actively engaged in investing.
As per the article, Kraken Ventures is still raising money and funding both cryptocurrency and non-crypto firms. The portfolio of the division includes businesses with headquarters in the US, Europe, and other continents.
Given that the later-stage valuations of IT and cryptocurrency firms have declined by 30% to 50%, Kraken Ventures understands the need for fair valuations.
Binance Labs Is Still Dedicated To Investing In Cryptocurrencies
Despite regulatory difficulties in the US, Binance Holdings’ venture arm, Binance Labs, continues to pursue its investment strategy. As per Bloomberg, the division prioritizes finding sincere initiatives with tangible products and revenue and looks for dedicated entrepreneurs.
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Following the fall of the bankrupt FTX exchange, Binance Labs has implemented stronger due diligence procedures while continuing to invest in cryptocurrency projects, including those situated in the United States.
In response to shifting market conditions, Binance, Coinbase, and Kraken are all three companies modifying their business plans. This includes putting more of an emphasis on businesses that have revenue and real products, paying more attention to global opportunities, and exercising greater caution when making investments.
The change is indicative of a willingness to manage regulatory obstacles, pool resources, and assist projects that will be sustainable over the long run.
Binance Coin (BNB) is now trading at $251 and has gained 2.8% over the last day as of this writing. In addition, it has shown a steady upward trend of 18% over the last 30 days, which is in line with the general direction of the market.
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