In May, KuCoin exchange’s research arm released a report on cryptocurrency performance, noting $1 billion in new investments, which represented a slight decrease from the previous month. The report highlighted that institutional investors predominantly favored Ethereum and EVM-focused platforms during this period.
Over 50% of the projects received financing between $1 million and $10 million, with Ethereum, EVM chains, and L2 networks such as Arbitrum and Polygon being the most favored by institutional investors. Among non-EVM chains, Solana led in institutional investment, followed by Bitcoin, Fantom, and TON.
Active Chinese Institutions
Major Chinese institutions remained highly active in the cryptocurrency space, investing in emerging technologies and public chain networks. For instance, Animoca participated in about 15 deals, while OKX invested in 11 projects. Other institutions like Cogitent Ventures, SNZ Holdings, DWF Labs, Polygon Ventures, MH Ventures, Haun Ventures, Waterdrip Capital, and GBV Capital were also among the top investors.
Modularity, Layer 2 (L2) Solutions, and Liquid Staking Derivatives (LSD) were the most popular narratives favored by institutional investors. The report highlighted a strong willingness among institutions to push for project exits through public listings. Additionally, there was a shift in focus towards memes, celebrity tokens, emerging narratives, and low market cap assets.
The report also noted a decrease in the proportion of Series A financing projects, while strategic financing projects increased. Investors were exploring alternative investment options due to tokens launched with extreme valuations and limited supplies. Notcoin emerged as a major beneficiary of this shift in investor preference.
The changes in cryptocurrency investments in May have introduced new challenges and considerations for investors and market participants, influencing their strategies and investment decisions. Despite a slight decrease in new investments compared to the previous month, the overall trend showcases ongoing capital interest and developmental potential in the cryptocurrency industry.
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