Funding for blockchain and Bitcoin companies may decline for the first time. What does this mean?

According to CB Insights, in the past nine months of this year, blockchain and bitcoin startups have raised $429 million in 92 deals. At the current pace, the number of blockchain and bitcoin companies raising funds this year is likely to decline for the first time since 2012.


Compared to the same period in 2015, the number of funding rounds for blockchain and bitcoin companies decreased by 16%, while the amount of funding decreased by 7%.
From the perspective of financing stage, the proportion of seed round financing in the first three quarters of this year fell below 60%, while it remained above 70% in the previous three years.

So far this year, Series A financing accounts for about one-fifth of the total. If this trend continues, the proportion of Series A financing for the whole year will hit a five-year high.
The change in the ratio of seed rounds to A rounds may indicate that the blockchain and Bitcoin fields are gradually maturing. If we look at the team in angel rounds and the product in A rounds, it means that the products of various companies are gradually beginning to be tested by the market, which is not good news for new teams.
This year, blockchain company Circle received $60 million in financing from Baidu, CreditEase, IDG, etc., becoming the first D round of financing in this field. The total amount of the top five financings in this field this year is $264 million, accounting for about 62% of the total financing. Four companies have raised more than $50 million in a single round of financing, including Circle, Blockstream, Ripple and Digital Asset Holdings.
Below are the top five financing companies. It can be seen that the products of these companies are almost mature and gradually have their own business models.
Digital Asset Holdings: A financial asset trading venue that allows investors to convert traditional currencies and Bitcoin at a lower price and in less time. Earlier this year, it received $52 million in Series A funding and also reached a cooperation with the Australian Stock Exchange to try a distributed ledger system.
Circle: It started as a Bitcoin wallet and currently mainly provides P2P payment services. With its services, you can directly transfer money to your friends via SMS. Circle also has business in China, but it seems to focus on cross-border payment issues and will not compete head-on with WeChat and Alipay. In June, it received $60 million in Series D funding.
Blockstream: Mainly develops Bitcoin applications, especially sidechain technology. Its Liquid sidechain allows free transfer between the sidechain and the mainchain. It received $55 million in financing in February this year.
Ripple: It uses blockchain technology to solve financial transaction problems for large banks around the world. Its main business is to help banks make cross-border payments more convenient. Its core product is the Ripple protocol. It received $55 million in Series B funding in September this year.
bitFlyer: It is a Bitcoin exchange that focuses on both virtual currencies and blockchain. It received 27 million in Series C funding in April.