Binance will trigger a tsunami of massive fundraising deals to wash over the crypto industry, according to Robert Le, senior analyst at venture capital research firm, Pitchbook.
The whopping $2 billion investment from MGX, a firm linked to the Abu Dhabi government, aligns neatly with what VCs forecast for 2025: that venture investments in the sector will double to $18 billion this year.
It could also help kick things into gear for other funds that are sitting on the sidelines.
“Binance’s $2 billion raise sets the stage for bigger deals,” Le told DL News. “It helped push the entire total raised in the first quarter to $4.7 billion.”
Le also stuck with his earlier prediction to DL News that VCs will pour some $18 billion into the sector this year.
‘Very active’
The bullishness comes as US president Donald Trump’s return to the White House rattles global markets.
The unpredictability of his tariffs against the US’s biggest trading partners have caused one Canadian politician to label it a “psychodrama.”
Trump’s policies have seen the total crypto market’s value slide more than 20% since his inauguration, with Bitcoin down 25% from its peak of $108,000.
The broader stock market wasn’t spared — with Elon Musk’s Tesla briefly shedding 50% of its value since he took his position as the head of the Department of Government Efficiency, or DOGE.
Yet, VCs remain bullish, Le said. “Investors are still very active,” he said.
Not only has Trump signalled an end to the Biden era crypto crackdown, many VCs still have billions of dry powder left.
For instance, investment behemoth Andreessen Horowitz is yet to deploy its $4.5 billion fund raised in 2022.
Another sign of more inbound big deals is that Kathryn Haun’s Haun Ventures is “out to market” a $1 billion fund, Le said.
“It will only go to late-stage companies.”
More diligence
Still, the memory of 2022’s market crash hasn’t completely faded.
Many VCs who backed projects with little more than whitepapers during the last bull market watched those investments evaporate when the downturn hit.
During the 2021 bonanza, which enjoyed widespread rallies in NFTs and other web3 sectors, VCs were quick to make a bid in the flourishing crypto market.
Portfolios of firms like a16z ballooned. Their portfolio has a stake in more than two-dozen companies, including Coinbase, dYdX, and OpenSea.
But the implosion of Do Kwon’s Terraform Labs, Sam Bankman-Fried’s FTX, and several crypto-friendly banks shook the industry.
“VCs got badly burned last cycle so now they are much more diligent,” Le said.
Indeed, traumatised investors remain cautious.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.
