Nick Chong · 2 days ago · 2 min read
Chinese investors are leading the pack for early-stage crypto funding in the U.S. and other regions, according to TechCrunch.
The Chinese Crypto Foray
In Silicon Valley, Chinese investment houses are often overlooked and substantially lack publicity, primarily due to small assets-under-management sizes and lower investment frequencies. In late-stage investment rounds, these funds are often lost to bigger investors, again, due to the lack of publicity and trust for their operations.
However, the largely-ignored crypto industry has opened new opportunities for Chinese investment houses, and as The Wall Street Journal reports, has enabled Chinese participation in over 40 percent of global venture financing, including increased activity in the U.S.
While Chinese citizens remain barred from investing and participating in cryptocurrencies and related activities, wealthy investors dominate 80 percent of the cryptocurrency mining market, courtesy of their investments in several mining rig manufacturers and pools.
Even cryptocurrency exchanges are predominantly led by Chinese investors, with three of the top five companies (Huobi, OKEx and Binance), registered in Hong Kong and commanding billions of dollars of the total crypto-market cap.
Using a Blockchain ‘Springboard’
China continues to maintain a rather hard stance on cryptocurrencies due to money laundering and other economic concerns. Despite the naysaying, President Xi Jinping called blockchain technology a “breakthrough” earlier this year and placed it among other rising techs for the country’s ambitious “Five-Year Plan.”
As a result, Chinese investors have access to proprietary information and government relationships pertaining to the growth of blockchain, as well as access to a disruptive asset class from the U.S.
Eric Ly, former CTO and co-founder of LinkedIn, underlines the significance of the Asian market:
“It’s a region that is not to be dismissed, especially in the crypto world in terms of the interest and the activities that are going on there.”
The East-West Alliance
As an encompassing technology, it’s essential for blockchain and cryptocurrency firms to micromanage fundraising from local investors while keeping in mind the global perspective for one’s success.
In this regard, Western cryptocurrency firms are actively seeking Chinese and Asian investors for three crucial aspects–knowlege, connections and an understanding of the regional markets.
There’s also a higher probability of local investors being more in touch with regional regulations and laws, and even knowing the steps to circumvent such obstacles. With this in mind, crypto firms mapping out their global trajectories have catapulted China, and the broader Asian market, to the forefront of formal crypto-investing.