Last Updated: March 16, 2022
FTX, one of the world’s biggest exchange platforms, announced that they will be investing $2bn in crypto start-ups, Financial Times informs. Their $2bn fund is probably one of the largest investment funds in the industry.
FTX, one of the busiest crypto exchange platforms, decided to channel a great deal of money into their new venture capital arm – FTX Ventures. The full funding of $2bn comes directly from FTX and CEO Sam Bankman-Fried himself. It’s not surprising that FTX decided to invest such an amount of money in crypto and in the blockchain industry, in general, given their background and primary business.
The announcement of FTX’s investment took place on Friday, giving a promising future to many crypto start-up companies. In a blog post, FTX stated: “Our first $2B fund will be flexible capital where we can invest in equity and/or tokens, at any check size and stage”. They plan on investing exclusively in industries that cover social, gaming, fintech, blockchain technology, and healthcare. Also, they don’t rule out the possibility of investing in tokens and other tradable assets.
Has Investing in Cryptocurrency Start-ups Become a Trend?
More and more people strive to learn how they can invest in crypto and some even learn how to mine because of the sudden popularity crypto gained during the pandemic. Hence, many companies started investing in crypto start-ups. In 2021 alone, venture capitalists invested a record $30 billion into crypto start-ups, which is roughly seven times more than the year before.
Because of the immense popularity crypto gained over the last two years, investing in crypto start-ups has become a trend. And it seems as if it’s not going away anytime soon. FTX alone owns Alameda Research, a company that’s made over 95 investments starting from 2020, according to PitchBook. Also, FTX sees great potential in NFT-powered video games. They even invested in Sky Mavis, the team that created the crypto game Axie Infinity. FTX is not alone in backing crypto start-ups; FTX’s main competitor, Coinbase made over 200 investments.
The companies which invest in crypto start-ups believe that the future lies in the crypto world, and many venture capitalists are especially excited about web3, the concept of a decentralized online ecosystem based on crypto. FTX states in their blog post that they are “transforming the future of financial services and building towards a future of web3”.