Study shows Bitcoin-native transactions outshine the broader crypto market

Bitcoin-Native Startups Outperform Crypto Sector in VC Deals, Says Trammell Venture Partners Report

According to a report released by Trammell Venture Partners on Thursday, Bitcoin-native startups are outperforming the overall crypto sector in terms of venture capital deals. While the number of crypto venture fundraising deals rose 1% in 2022 from the previous year, deals involving companies focused primarily on Bitcoin skyrocketed 52.9%. The total capital raised by firms founded with the first principle that bitcoin is the global monetary asset of the future also increased, rising 13.9% in 2022 to $343 million.

Despite the growth, TVP believes that there is still a severe misallocation of capital, with companies focused on Bitcoin accounting for just 2% of total crypto deals last year and only 1.3% of venture dollars invested. Bitcoin accounts for about 42% of the total crypto market capitalization, and the firm, which launched the first dedicated Bitcoin-native ecosystem-focused fund in 2021, sees advances such as the Lightning Network making the segment ripe for fresh activity.

“Bitcoin has already won the base monetary reserve layer for the Internet, full stop. It’s just not broadly recognized as such,” TVP managing director and founding partner Christopher Calicott said in an interview, adding that excitement in the sector is often directed toward projects and protocols that move faster.

Potential for Growth in Bitcoin Stablecoins

While the Bitcoin network advances slowly by design, Calicott sees potential for growth in a number of areas, including stablecoins.

Advantages of Stablecoins

  • Stablecoins are cryptocurrencies designed to maintain a stable value by pegging their value to a specific asset or basket of assets.
  • They offer the advantages of cryptocurrencies such as decentralization, security, and privacy, while also providing the stability of traditional currencies.
  • They can be used as a medium of exchange, a store of value, or a unit of account.
  • They can also be used for remittances, micropayments, and other applications where the volatility of traditional cryptocurrencies is a disadvantage.

Calicott believes that stablecoins could play a significant role in the future of the crypto sector, especially as more businesses and individuals adopt cryptocurrencies for everyday use. He also sees opportunities for Bitcoin-native startups to innovate in this area and create new products and services that leverage the advantages of stablecoins.

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