Blockchain startups raised $822 million in the first half of 2019, down from the previous six-month period, but increasing seed funding stage deals hinted at a strong pipeline of entrepreneurial zeal in the market.

A study published this week by venture capital firm Outlier Ventures showed that total funding raised during the first half slid for the first time since it began its annual survey of the blockchain and digital asset industry in 2014.

This may have been a hangover from the long price slump that followed the record run for Bitcoin and many other cryptocurrencies in late 2017-early 2018, and what was more notable during the first half was metrics such as transactions, hash power and new wallets being opened all showed strong recovery signs.

Entrepreneurial Zeal

Lead analyst of the report Joel John said that while the total raised figures had fallen for the first time, the total number of deals – 279 – included 159 seed stage deals, thus indicating “new entrepreneurial zeal in the industry has not declined in spite of the bear market” that existed before June’s dramatic rally.

Meanwhile, the enterprize blockchain space was moving from merely testing to now contributing open-source code. The report’s author said:

Enterprizes are no longer building proofs of concepts for the industry, they are rolling out fully-fledged open-source projects and contributing to its growth: EY, JPMorgan and Target have each released open-source code over the past six months.

Libra an ‘Inflection Point’

The report added that an inflection point for blockchains as a technology may have been the announcement by Facebook of the intended launch in 2020 of its Libra cryptocurrency.

This could indicate that social networks are evolving from an advertisement-driven model to potential social financial service marketplaces. Facebook could also match social data with financial data and develop further efficiency in how products are advertised to their users.

During the hype of the Libra announcement and the official responses that followed, Bitcoin’s price rallied. During June, it climbed from around the $8,000 mark to an 18-month high of $13,827, surprising analysts and market participants alike.

“It could be noted,” John said, “That price is simply following other indicators driven by actual demand in comparison to pure hype of the past.”

Coin Offering Market Matures

Another big growth area was in coin offerings issued directly by exchanges – or initial exchange offerings (IEOs) – and Bitfinex said it raised $1 billion in an IEO.

John added: 

IEOs have proven instrumental in helping startups with discovery, listings, and liquidity.

The report concluded that the market is maturing as institutions and governments pay closer scrutiny and, indeed, become involved. Unlike the “hubris” of 2017, today’s tokens have better-defined ecosystems associated with them, while trading infrastructure has evolved.

The report’s author concluded:

With this in context, it is safe to suggest winter is finally over and we may witness a full-blown summer around Bitcoin’s halvening next year.