3 must-have factors VC Investors are looking for in Crypto Start-Ups

This year has seen a steady increase in interest in the crypto realm. With all of the excitement, VC investors are looking for the finest ideas to invest in.

Interest in the crypto area exploded in 2021. There were a number of factors that contributed to the increased interest from outsiders in the industry.

Some things were difficult to ignore, whether it was Bitcoin’s new all-time high or the development of NFT domination.

VC investors- pour some money

With the crypto industry exploding, investors — not just the little guys – are clamoring for a piece of the action.

According to research from Galaxy Digital, VC investors poured $33 billion into the crypto market last year. To repeat that assertion, over 5% of all venture capital investments went to crypto and blockchain firms.

1. Hot topic? Then YES

You’re in luck if your startup deals with one of the industry’s trendiest subjects.

The first VC investment trend shows that investors are interested in industry fads.

We’re not talking about passing fads like Dogecoin prices, though.

These are long-term movements that are forming quasi-industry-like sub-industries within the decentralized space. The remarkable potential for growth in the next 5-10 years is a hint of such changes.

NFTs: Of course, it’s worth emphasizing the attention that non-fungible token initiatives attract in terms of VC funding. According to PitchBook, approximately $900 million in tech startups was invested in NFT-related startups in January 2022 alone.

GameFi: This is an excellent example of a crypto sub-industry that is currently gaining a lot of interest. This area is hot, according to Adam O’Neill, CMO of Bitrue, a digital asset management platform.

2. Solve current problems

With the rise of NFTs, environmentalists addressed the business concerns about energy-intensive mining and minting.

Companies that are environmentally conscious have a double edge. They not only contribute to a more sustainable future for the world, but they also attract investors.

“Right now, one of the big obstacles to crypto acceptance is environmental concerns,” adds O’Neill. “The energy cost of blockchains, especially proof-of-work, has made its way into the public consciousness. It’s frequently cited by consumers as the main reason they don’t own any cryptocurrency.”

Furthermore, notable figures such as Elon Musk and Jack Dorsey have discussed a greener future for cryptocurrency.

3. Boss of social game

The aforementioned Bored Ape Yacht Club is an excellent example of both industry trends and the next round of venture capital investment.

Investment firms are eager to sink their teeth into new projects with thriving communities both inside and internationally.

“The first question that arises is, does the leadership team have experience in crypto?” adds O’Neill. What is their vision for their projects and the industry’s future? What level of technological know-how does their development staff have?

While these aren’t the only items on large investors’ radar screens, they are clearly themes to keep an eye on.

The amount of money being invested in the space is not likely to slow down anytime soon. For entrepreneurs trying to get their ideas off the ground, it’s a promising market.

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Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing