Investing in cryptocurrency is a high-risk/high-reward activity, whether that entails day-trading in the open market, buying into institutional investment funds or investing in particular blockchain enterprises.
In recent years, the blockchain space has attempted to disrupt venture funding and investment through a particularly powerful use case in crowdfunding. An influx of hype and amateur investment reached a peak during the 2017 to 2018 initial coin offering, or ICO, bubble in which projects raised billions of dollars in return for assets of questionable value or utility, quickly putting the industry in the sights of the United States Securities and Exchange Commission and similar regulatory authorities.
There is ongoing discourse on and experimentation in how to fund open-source protocol development that doesn’t involve the traditional route of venture capital and that better aligns the incentives of all stakeholders, from the developers to the users.
Seeing where investment capital is going in the space can provide a gauge of market sentiment around industry trends and potential high-growth areas.