The Impacts of Cryptocurrencies on Venture Capital

Venture capitalist firms are paying close attention to the amount of capital that has been raised through initial coin offerings (ICO) in 2017. Some venture capitalists believe that ICO could disrupt the way venture financing is structured.
As of November 30, 2017, 228 ICOs have raised $3.6B, CoinSchedule reported. The capital raised via ICO overshadowed that of seed-stage VC funding for internet companies in 2017. The numbers have left many venture capitalist thinking about how initial coin offering might affect the traditional VC model. Similar questions were raised when crowd-funding platforms started to gain momentum 2008.
Currently, Ethereum is trading over 40x of its price at the beginning of 2017 and Bitcoin is trading above $11,000. Blockchain technologies have a wide range of potentially disruptive applications. They have also received plenty of attention in 2017, fuelled by the ICO phenomenon this year.
Traditional venture capital firms have invested little in either crypto assets or blockchain-related tech. Blockchain depends on a public distributed network that is kept by each network participant. It has the potential to cut the need for the middleman as the two parties involved in a transaction could deal directly with each other.


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