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Over 11% of world VC funding in blockchain and crypto was funneled in the direction of ventures based mostly in Hong Kong and Singapore all through 2023.
The findings mark a major rise from the mere 2% allocation in 2021.
That’s based on analysts at PitchBook who attributed this variation to a number of elements, together with the collapse of Sam Bankman-Fried’s FTX crypto alternate and the next chapter domino effect it created that compelled many U.S.-based crypto firms to reassess their methods.
In line with the report, regulatory uncertainties and the impact of main crypto corporations like Binance and Gemini falling foul of authorities have compelled many firms to cut back the scale and magnitude of their U.S. operations.
Some have even sought refuge in world crypto hubs abroad. The report quoted Bryan Chow, accomplice at web3 VC investor Facet Door Ventures, who acknowledged that many crypto firms had shifted their base of operations to Hong Kong to leverage its supportive authorities stance in the direction of web3 and crypto.
PitchBook additionally highlighted the ban on crypto buying and selling in mainland China as a chance for Singapore and Hong Kong to place themselves on the forefront of decentralized finance.
Hong Kong issued its first retail buying and selling licenses for Bitcoin (BTC) and Ether (ETH) in August, whereas Singapore granted Coinbase a full buying and selling license in October.
Regardless of the collapse of native crypto lender Three Arrows Capital (3AC), the Singaporean authorities nonetheless helps the trade, albeit with a a lot stricter eye on it.
In November, PitchBook reported that general crypto funding dropped by greater than 60% within the third quarter of 2023 in comparison with the identical interval in 2022. The state of affairs compelled a number of crypto startup funders, together with Coinbase, to cut back their assist.
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