Huge Reduction in Capital Generation With Blockchain Companies Preferring Traditional Sources Over Crowdfunding

A large number of blockchain companies are seeking to obtain finances from traditional sources rather than opting for crowdfunding which was done when blockchain hype inculcated in the past.

A majority of blockchain companies have been witnessed seeking financial assistance from traditional sources. However, in the past, when the blockchain hype surged, financial assistance was mostly sought from crowdfunding. This is a major switch in the blockchain industry because in the past capital was generated through ICOs i.e. Initial Coin Offerings. These ICOs were issued by some of the notable and globally popular crypto trading platforms which managed to sell ICOs for generating capital.

However, in recent times, financial assistance is being provided to blockchain companies through venture capital funds. This means that the capital is being tapped in the form of private capital. Resultantly, this is unlikely to generate the same amount of funds as were done in the past. (In the past it is well documented that the blockchain companies managed to collect funds in multi-billions through several fundraising projects.)

Even if the collection would be on the lower side but the ultimate benefit of seeking financial assistance through capital ventures is twofold. For instance, such an initiative would be beneficial for organizations and users simultaneously.

Meanwhile, a blockchain company is continuing its struggle of collecting money through the sale of private tokens and generated 10 Million Euros. The aim of the company is to expand its blockchain operations in other regions as well.

On the other hand, two companies have entered into a partnership namely Cocordium and Geely Group. The purpose of the partnership is to provide funds for blockchain-based companies to help run their business operations and expansion. In particular, those companies who are keen to offer sovereign identifications and smart contracts before the start of the 3rd quarter of the year.

However, the decline in capital generation is obvious because of the shift from crowdfunding to traditional sources. The last blockchain company to wrap up its fundraising campaign by Stakewise which is a project of Ethereum. The project collected a total of just US$ 2 Million.

Capital generation is an integral piece and parcel of any type of business. Usually, the funds are generated either through equity or via debt. However, if a crypto business is intending to generate funds, this could be very challenging because of several reasons. The obvious reason is the requirement of “credit history”, if a crypto business is looking to seek financial assistance from any financial institution.

But it is said that if someone needs to generate capital then the use of Blockchain is far better than traditional means. It not only guarantees the generation of big money but also generation of funds is efficient and secure if it is done through the Blockchain platform.

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