Blockchain Investment Surges as VC Funding Replaces Declining ICOs

Blockchain investment is growing rapidly, despite a slowdown in initial coin offerings (ICOs). A new report from ABI Research highlights shifting trends in funding and technology. Experts suggest the current downturn in crypto markets may actually refine the industry by removing weaker projects. On August 28th, ABI Research published findings on global blockchain revenues. The report noted that while ICO activity has declined, venture capital (VC) funding is now a key driver. In 2018, VC investments reached $3.1 billion across 620 rounds—a sharp rise from $850 million in 153 rounds the previous year.

Algo Capital recently secured $200 million for its VC fund, double its initial target. This surge in funding reflects broader investor confidence in blockchain’s long-term potential. Michela Menting, ABI’s research director, argued that the ongoing 'crypto winter' would only have a short-term effect. She believes it will help eliminate fraudulent schemes while encouraging stronger projects. However, challenges remain for blockchain applications outside finance and insurance. The lack of a 'middleware' layer—tools that bridge different systems—has slowed adoption in other sectors. Looking ahead, ABI predicts growth in blockchain-as-a-service (BaaS) solutions from 2021 onwards. These offerings will likely focus on non-platform-based components, making the technology more accessible to businesses.

Stricter regulations and tax policies on cryptocurrencies are pushing investors toward VC-backed projects. With rising funds and evolving technology, blockchain investment appears set for continued expansion. The shift from ICOs to structured VC funding suggests a more mature market is emerging.