LONDON - Major finance and tech firms are pouring money into startups building technology to develop the crypto market, even though they’re steering clear of the volatile currencies themselves.
Such bets, by companies including London Stock Exchange Group and Microsoft Corp, spiked over five-fold to a record $2.4 billion over 117 investments in 2018. This suggests large companies see promise in the nascent technology, even as it struggles for acceptance. Bitcoin slumped by three-quarters last year after nearing a record of $20,000 in its frenzied 2017 bubble. It’s still prone to wild price moves, underscored by a recent 20 percent jump that caused puzzlement among traders and analysts.
“There are two dynamics at play,” he said. “We can get something up and running and achieve cost savings, and also look longer term at ways of deploying the technology in more transformative ways.” “People are really enamored by tokenisation - the ability to produce coins or other forms of value - so that’s where we see all of the action at the moment,” said Anton Ruddenklau, global co-head of fintech at KPMG.Bets involving corporate venture capital are usually small, the data shows. Deals this year had a median value of $6.5 million, a notch below the $8 million of last year.
Cryptocurrency miners and exchanges make up the four biggest VC-backed firms by valuation, according to the PitchBook data.
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