Bitcoin, venture capital and security tokens flash green: Report

The blockchain industry does not exist in a bubble. The impact of the rest of the world’s economic turmoil seems to be stomping all over the progress of the “blockchain revolution.” Traditional markets like the S&P 500 index crashed by more than 11.5% in September, while the tech-heavy Nasdaq 100 index plummeted by 12.5%. However, Bitcoin (BTC) may have seen a decoupling, having only dropped 3% during this same period. 

For some, these are signs of a bottom for Bitcoin, but it does not necessarily mean an immediate reversal is upon the market. Are there other positive flashing signals we can see in the charts?

Every month, Cointelegraph Research releases an Investor Insights report that analyzes key indicators from different sectors of the blockchain industry. Gauges from 10 segments in the blockchain space — including regulation, crypto mining, security tokens, Bitcoin and Ether (ETH) derivatives, and venture capital (VC) activities — are analyzed by those working closely with the subject matter.

Download and purchase this report on the Cointelegraph Research Terminal.

Bitcoin and beyond

Venture capital is often a lagging indicator of market sentiment in traditional markets. In 2021, the blockchain space saw continuous increases in capital inflows per quarter. In 2022, Q1 continued this trend, while Q2 began to show a slowdown in VC capital coming into the space. However, September saw a 20.6% uptick in the capital investment of VCs over 93 deals throughout the month.

Web3 had the greatest number of individual deals at 31 and brought in $378.8 million, while Infrastructure had 29 deals and saw the bulk of investment at $913.6 million. This could be another indicator that the bottom of this cycle of the bear market is in.

Security token volume grows

In September, security token market capitalization grew by 6.27% — $18.7 billion compared with $17.6 billion in August. The volume also exploded by 19.76% over the previous month. The action within security token markets is not the only positive, as news that Hong Kong’s government is encouraging proposals for security tokens to be given to the Securities and Futures Commission (SFC) bodes well for the sector.

While this may be an often neglected area of interest by the average blockchain investor, security tokens do help demonstrate mainstream adoption in different applications for the blockchain industry and could be a good indication of how all crypto markets play out in the near future.

The Cointelegraph Research team

Cointelegraph’s Research department comprises some of the best talents in the blockchain industry. Bringing together academic rigor and filtered through practical and hard-won experience, the researchers on the team are committed to bringing the most accurate and insightful content available on the market.

Demelza Hays, Ph.D., is the director of research at Cointelegraph. Hays has compiled a team of subject matter experts from across the fields of finance, economics and technology to bring to the market the premier source for industry reports and insightful analysis. The team utilizes APIs from a variety of sources in order to provide accurate, useful information and analyses.