In May, KuCoin exchange’s research arm released a report on the performance of cryptocurrencies, noting a total of $1.02 billion in new investments. This amount represented a slight decrease from the previous month, highlighting a 6.4% decline from April’s total of $1.09 billion. Despite this slight decrease, the report indicated a broader scale increase of 10.61% from May 2023, where investments totaled $905 million.
During the month of May, institutional investors predominantly favored Ethereum and EVM-focused platforms. Over 50% of the projects received financing between $1 million and $10 million, showcasing a preference for investing in projects with significant potential for growth. Ethereum, EVM chains, and Layer 2 (L2) networks such as Arbitrum and Polygon were among the top choices for institutional investors.
Major Chinese institutions played a significant role in the cryptocurrency investment scene, with institutions like Animoca and OKX participating in multiple deals. Other notable investors included Cogitent Ventures, SNZ Holdings, DWF Labs, Polygon Ventures, MH Ventures, Haun Ventures, Waterdrip Capital, and GBV Capital. These institutions focused on emerging technologies and public chain networks, signaling a growing interest in the industry as a whole.
Modularity, Layer 2 solutions, and Liquid Staking Derivatives (LSD) emerged as the most popular narratives favored by institutional investors. There was a notable shift towards project exits through public listings, with a decrease in Series A financing projects and an increase in strategic financing projects. Investors also shifted their focus towards memes, celebrity tokens, emerging narratives, and low market cap assets. Notcoin, in particular, benefited from this shift in investor preferences.
These changing investment trends have introduced new challenges and considerations for investors and market participants. The rise of tokens with extreme valuations and limited supplies has led investors to explore alternative investment options. This shift in the market landscape has influenced strategies and investment decisions, requiring investors to adapt to the evolving nature of the cryptocurrency industry.
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