Crunchbase report indicates: Investments in blockchain are rapidly declining.

While the price of Bitcoin has recovered from last year's bear market bottom, investors and institutions seem far less enthusiastic about crypto projects and blockchain compared to 2018.

The report released by Crunchbase, a Crunchbase enterprise data platform on September 2nd, shows a significant decline in the funding amount for cryptocurrency and blockchain-related companies this year.

In addition to ICOs, venture capital investments are also showing a decrease in interest. Crunchbase has recorded approximately $3.4 billion in ICO and private funding for 2019, compared to a high of $12.9 billion in 2018.

In fact, any investment in blockchain, whether by venture capital firms or traditional financial institutions, contributes to the adoption of this technology. While many startups are still able to secure some funding, large institutions are investing less in blockchain.

Investment in cryptocurrency projects and blockchain technology-related companies by institutional investors so far this year is approximately $2 billion, excluding ICOs. This figure is significantly lower than the total of $4.65 billion in 2018, as shown in the graph below.

Some of the most prominent venture capital firms active in the blockchain space have seen a decrease in activity in 2019. For example, Andreessen Horowitz participated in 14 funding rounds worth nearly $850 million in 2018. However, as of this year, the company has only been involved in five rounds with a total of $75 million.

Digital Currency Group and Blockchain Capital, two of the most active venture capital firms, have also significantly reduced their investment projects and capital commitments.

In response, venture capital firm Andreessen Horowitz believes that the widespread adoption of blockchain may ultimately disappoint. The firm points out:

Blockchain is like a new type of computer, with its highlight being the trust between users, developers, and the platform itself. However, in order to generate these features, blockchain may sacrifice other functions, such as transaction processing scalability. This could lead to its obsolescence, similar to how early mobile phones were phased out by the public.

Nevertheless, this year, the South Korean exchange Bithumb has raised $200 million in Series A funding, and the well-known trading platform Kraken has secured $100 million in Series C funding.

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