As the cryptocurrency industry evolves, major players such as Binance, Coinbase, and Kraken reevaluate their startup support strategies. This shift comes as the market experiences a decline in crypto venture funding and increased regulatory scrutiny.
These crypto heavyweights are adjusting their investment focus, exploring international opportunities, and prioritizing startups with tangible products and revenue.
Crypto Venture Funding Plummets
According to a report by Bloomberg, Coinbase Global, known for being a significant investor in the cryptocurrency realm, has witnessed a decline in its investing activity in recent months.
This slowdown aligns with an industry-wide trend as corporate venture capital arms reduce their investments in crypto companies. In the third quarter of this year, overall crypto venture funding dropped by 63% to $2 billion compared to last year’s period.
Coinbase Ventures, the venture arm of Coinbase, has adjusted its investment strategy to focus on startups based outside of the United States. This shift is driven by the increasing regulatory scrutiny the crypto industry faces, leading some international companies to exclude the US from their business plans.
Coinbase Ventures has made over 50 investments across 15 countries in the past year, particularly focusing on India, Singapore, Australia, and the UK.
Kraken Ventures, the venture arm of Kraken exchange, has also experienced a decline in deal count over the past year. Nonetheless, the team remains actively involved in making investments.
According to the report, Kraken Ventures continues to raise funds and invest in crypto and non-crypto startups. The division’s portfolio comprises companies based in the US, Europe, and other parts of the world.
Kraken Ventures recognizes the need for realistic valuations, as crypto and tech companies have seen 30% to 50% declines in later-stage valuations.
Binance Labs Remains Committed To Crypto Investments
Binance Labs, the venture arm of Binance Holdings, maintains its investment strategy despite regulatory setbacks faced by Binance in the US. According to Bloomberg, the division seeks committed founders and emphasizes identifying genuine projects with real products and revenue.
Binance Labs continues to invest in crypto projects, including those based in the United States, while implementing enhanced due diligence measures following the collapse of the bankrupt FTX exchange.
All three companies – Binance, Coinbase, and Kraken – are adjusting their strategies to adapt to changing market conditions. This includes a greater emphasis on startups with tangible products and revenue, a focus on international opportunities, and a more cautious approach to investing.
The shift reflects a desire to consolidate resources, navigate regulatory challenges, and support projects with long-term viability.
As of the time of writing, Binance Coin (BNB) has experienced a 2.8% gain in the last 24 hours and is currently trading at $251. Furthermore, it has demonstrated a consistent upward trend of 18% over the past 30 days, aligning with the prevailing market trend.
Featured image from Shutterstock, chart from TradingView.com