Ethereum, EVM chains, and layer-2 (L2) network projects remained popular among institutional investors in recent investments.
KuCoin exchange’s research arm released a report on cryptocurrency performance in May, noting $1 billion in new investments – a slight decrease from April.
The report highlighted that institutional investors predominantly favored Ethereum and EVM-focused platforms during this period.
$1 Billion in Investment
Earlier this week, KuCoin Research published a report indicating that in May alone, the crypto realm saw a public disclosure of about 156 investments. The total amounts invested in the 156 projects summed up to about $1.02 billion.
The report indicated that May’s investment figures were approximately $70 million short of the previous month, representing a 6.4% decline from April’s $1.09 billion. However, on a broader scale, the latest figures show a 10.61% increase from May 2023, which saw $905 million in disclosed investments. The report highlights that this new investment reflects “ongoing capital interest and developmental potential in the industry.”
Over 50% of the projects received financing between $1 million and $10 million. Ethereum, EVM chains, and L2 networks such as Arbitrum and Polygon were the most favored by institutional investors. Among non-EVM chains, Solana led in institutional investment, followed by Bitcoin, Fantom, and TON, which were also among the top 15 networks attracting investor interest in May.
Major Chinese institutions remained highly active, investing in emerging technologies and public chain networks. For instance, Animoca participated in about 15 deals, while OKX invested in 11 projects. Others like Cogitent Ventures, SNZ Holdings, DWF Labs, Polygon Ventures, MH Ventures, Haun Ventures, Waterdrip Capital, and GBV Capital were also in the top 10.
Modularity, Layer 2 (L2) Solutions and Liquid Staking Derivatives (LSD) were the most popular narratives favored by these institutional investors.
For instance, the report found that: “There is a strong willingness among institutions to push for project exits through public listings.” This came as data revealed a decrease in the proportion of Series A financing projects from 10% to 7.77%, while strategic financing projects increased from 15.73% to 18.45%.
Major Dynamic Shift in Investor Focus
According to the report, investors shifted their focus towards memes, celebrity tokens, emerging narratives, and low market cap assets. Tokens launched with extreme valuations and limited supplies led investors to explore alternative investment options. Notcoin emerged as a major beneficiary of this shift in investor preference.
Additionally, the report highlighted that recent regulatory developments in the United States have significantly impacted the legal and operational landscape of the crypto market. These changes have introduced new challenges and considerations for investors and market participants, influencing their strategies and investment decisions.