This week in Bankchain: Crypto-backed cards and global blockchain investment trends
- 2021 was a breakthrough year for blockchain and crypto firms, with record funding, mega-rounds, and unicorn births.
- Global blockchain funding grew over 700% year-over-year as investors pumped millions into crypto and NFT startups.
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Crypto-backed cards have become one of the world’s fastest-growing card categories. They offer consumer and commercial cardholders a number of benefits such as reduced or waived foreign conversion fees, near-real-time transactions, rewards, and multi-currency features that allow them to move between crypto and fiat in a simple and secure way.
Payment processing firm i2c recently released a report which finds that crypto card programs are growing much faster on average than traditional cards and have seven times less attrition when compared to non-crypto programs. It also finds that crypto-backed programs are used in cross-border transactions at a significantly higher rate (28% of all transactions) than traditional, non-crypto programs (10%).
i2c’s president Jim McCarthy says crypto-backed payments are poised to become one of the most disruptive payment technologies and have the potential to change the way globally oriented consumers and businesses perceive and make payments.
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Global blockchain investment trends in 2021
2021 was a breakthrough year for blockchain and crypto firms, with record funding, mega-rounds, and unicorn births. Global blockchain funding grew over 700% year-over-year as investors pumped millions into crypto and NFT startups.
The State of Blockchain 2021 Report from CB Insights digs into global blockchain investment trends over the past year. Here are some notable facts from the report:
Global blockchain funding reached $25.2 billion in 2021 (up 713% YoY)
VC funding to blockchain startups hit new highs in every quarter of 2021, driven by growing consumer and institutional demand for crypto. Blockchain funding accounted for 4% of global venture capital, up from just 1% in 2020. That share is likely to rise in 2022 thanks to emerging crypto, NFT, and Web3 startups.
1,247 blockchain deals, 88% growth
The number of blockchain deals crossed 1,000 for the first time in 2021, almost doubling 2020’s 662. The 2021 total amounts to 5 blockchain deals per business day. 79% of the deals were early-stage, signaling a nascent market of developing companies — and an even stronger funding environment in 2022 as startups mature and find product-market fit.
$15.5 billion in mega-round funding
Mega-rounds of over $100 million were the driving force behind blockchain’s record funding year. The 59 mega-rounds in 2021 accounted for just 5% of total deals but 60% of total funding. The biggest mega-round deals went to crypto exchanges, brokerages, NFTs, gaming, and payments.
47 blockchain unicorns, 40 born in 2021
The global blockchain unicorn count jumped from 9 to 47 in 2021, with 40 unicorn births (and 2 public exits). Over half of blockchain unicorns are based in the US (26), followed by Asia (10) and Europe (5). Crypto exchange FTX leads with a $25 billion valuation. NFT marketplace OpenSea comes in second at $13.3 billion.
NFT funding saw nearly 13,000% growth
Funding to NFT startups grew 130 times compared to the previous year to reach $4.8 billion. Gaming, marketplaces, and infrastructure are the three NFT categories driving the funding craze. Investors also believe NFTs have a significant role to play in Web3 and the metaverse.
What we’re reading
- JPMorgan expands crypto footprint with investment in blockchain firm TRM Labs (Yahoo Finance)
- Circle launches business accounts for USDC transactions (Cointelegraph)
- Coinbase teams up with Remitly on US-Mexico money transfers (Banking Dive)
- More banks join blockchain-based carbon marketplace (Finextra)
- SEC ratchets up crypto crackdown starting with BlockFi (Axios)
- Circle doubles valuation to $9 billion in tweaked SPAC deal (Reuters)
- Revolut seeks senior blockchain engineers amid token rumors (The Block)