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Balance brings in $30m, Hypernative collects $16m

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Venture capitalists are raising a ton more money for crypto-related funds this year compared to last year’s dismal downturn.

According to the latest report from PitchBook, published on Sept. 5, the median fund size is up 65.1% to $41.3 million in 2024.

Nowadays, it’s common for crypto-savvy investors to put together midsized crypto VC funds — coffers ranging from $100 million to $500 million. “These funds are large enough to support industry growth but small enough to avoid the deployment challenges faced by megafunds, making them crucial to the current ecosystem,” PitchBook Senior Analyst Robert Le writes.

But just because the money is there doesn’t mean VCs aren’t cautious. According to Le, the time between fundraises and the duration to close funds have both lengthened over the past three years.

“This trend signals a challenging fundraising environment ahead as LPs become more selective and risk-averse in the wake of recent market downturns,” Le adds.

It’s worth noting that, in the second quarter of this year, Galaxy data shows VCs invested just under $3.2 billion (a 28% increase quarter-over-quarter) into crypto and blockchain-focused companies. But, that money was allocated to 577 deals — a 4% decrease quarter-over-quarter. In the prior three-month period, VC investment into crypto and blockchain startups increased by 29% compared to the previous quarter, totaling about $2.49 billion across 603 deals.

In this week’s column, crypto.news is spotlighting some of the startups that grabbed headlines in recent days. According to crypto fundraising tracker, Crypto Fundraising, these companies raised close to $70 million in disclosed VC between Sept. 1 and Sept. 7.

Balance, $30 million

  • Gaming platform E-PAL introduced Balance, a new AI-powered blockchain experience platform, following two successful funding rounds led by Andreessen Horowitz (a16z) and Galaxy Interactive.
  • Animoca Brands, K5, CLF Partners, MK Capital, Heights Fund, AMBER, MarbleX, Mantra, Tuna, Aptos Labs, IOBC, Leland Ventures, Halon, Uphonest, Taisu Ventures, Gate Labs, DWF Ventures, BING, and WAGMI, also contributed to the $30-million total.
  • The proceeds will go toward developing the Balance infrastructure — “an open, inclusive, and equitable Web3 ecosystem.”

Hypernative, $16 million

  • Hypernative, known for developing an early-detection web3 security solution, raised $16 million to accelerate adoption of its AI-powered security products.
  • Investors in the Series A led by Quantstamp include Bloccelerate VC, Boldstart Ventures, Borderless Capital, CMT Digital, IBI Tech Fund, Knollwood Investment Advisory, Re7 Capital, and some notable angels.
  • This brings the total raised by Hypernative to $27 million. The startup previously collected $9 million in funding from Boldstart and IBI.

Puffpaw, $6 million

  • PuffPaw, a blockchain-based e-cigarette project, clinched $6 million in seed funding led by Lemniscap Ventures.
  • The project is geared toward users who wish to quit smoking. It records their smoking habits and rewards them with tokens.

TrendX, $5 million

  • TrendX successfully closed its Series A funding round, clinching $5 million.
  • AHZ, Promontory, Coinstash, Frontier Research, Coresky, Tido Capital and Bullperks
  • The startup previously raised $1 million in seed money, bringing the total to $6 million.

IDA, $6 million

  • IDA, a Hong Kong-based digital asset company, secured $6 million in a seed funding round led by CMCC Global, under its Titan Fund, and Hashed.
  • The company aims to launch its “first fiat-referenced stablecoin” called HKDA, which is designed to be regulated in Hong Kong.
  • Hack VC, Anagram, GSR, Protagonist, Brinc, Chorus One, Kenetic, SNZ, and Yolo Investments also joined the fundraising effort. Raj Gokal, co-founder of Solana (SOL), is a backer.

CryptoHunter World, $2.8 million

  • CryptoHunter World, a hybrid gaming service, completed a $2.8 million private sale round.
  • Supported by leading venture capital firms, including IOST, HG Ventures, Mindfulness Capital, Bigcandle Capital, Web3Wave, and Layer-OTC, this fundraising will help bring the blockchain-based collectible role-playing game into the web 3.0 space.

Additional funding rounds: undisclosed amounts

  • Blabla: Closed a seed round with participation from Nebula Investment, the European Blockchain Association (BCAEU) and Hopechain.
  • Dropnest and Cycle Network: Both startups are backed by Manta Network.
  • Vanilla Finance: YTWO, UOB Venture, Pluto Capital, Paper Ventures, Openspace, Notcoin, HTX Ventures Logo, Catizen and ABCDE providing seed funds.
  • Kroma: The Layer 2 blockchain solution provider completed a Series A funding round with backing from Asia Advisors Korea, Gate Ventures, ICC Venture, Planetarium, Presto, RFD Capital, Taisu Ventures, The Spartan Group, Waterdrip Capital, and other additional partners have also participated in this round.
  • Pencils Protocol: The startup raised an undisclosed amount of seed funding from Bing Ventures and at least three other investors.

For last week’s edition of our “Crypto VC” column, click here.



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Blockchain Association urges Trump to prioritize crypto during first 100 days

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The Blockchain Association has called on president-elect Donald Trump and Congress to prioritize five key actions during the administration’s first 100 days to establish the U.S. as a global leader in cryptocurrency innovation. 

In an open letter, the industry group outlined specific measures to address regulatory challenges and support the domestic digital asset economy.

The Blockchain Association is a U.S.-based crypto lobbying group advocating for a regulatory framework for cryptocurrencies. They emphasized lifting the bank account ban on crypto companies and appointing new leadership for the SEC, Treasury Department, and IRS. 

They also proposed creating a cryptocurrency advisory committee to work with Congress and federal regulators.

Five priorities for Trump’s first 100 days

The letter highlighted five steps aimed at fostering a supportive environment for crypto businesses and users:

  1. Creating a Crypto Regulatory Framework
    The Blockchain Association urged Congress to draft comprehensive legislation for cryptocurrency markets and stablecoins. This framework, it argued, would balance consumer protection with innovation. Stablecoins are digital currencies tied to traditional assets, such as the U.S. dollar, offering price stability for users.
  2. Ending the Debanking of Crypto Companies
    The group expressed concern over crypto businesses losing access to banking services. These companies rely on traditional banks to handle payroll, taxes, and vendor payments. Without banking access, their operations can be severely disrupted.
  3. Reforming the SEC and Repealing SAB 121
    The association called for a new SEC chair to replace what it described as a hostile regulatory approach under the current leadership. It also recommended reversing SAB 121, an accounting rule that imposes strict requirements on crypto-related businesses.
  4. Appointing New Treasury and IRS Leadership
    Tax policies for cryptocurrencies, such as the proposed Broker Rule, have been criticized for potentially stifling innovation and driving companies offshore. The letter urged the administration to appoint leaders who would support privacy and foster a fair tax environment for digital assets.
  5. Establishing a Crypto Advisory Council
    The letter proposed a council to facilitate collaboration between the industry, Congress, and federal regulators. Public-private partnerships, it said, could create rules that protect consumers while encouraging innovation.

Crypto collaboration

In their letter, the Blockchain Association emphasized its readiness to work with the administration and 100 member organizations to ensure the U.S. regains its position as a financial and technological innovation leader.

“We stand ready to work with you to ensure the United States can regain its position as the crypto capital of the world,” the Blockchain Association wrote in the letter.

This letter comes as Trump adopts a strong pro-crypto stance. Earlier in November, reports emerged that Trump plans to create a White House position solely focused on cryptocurrency and related policies.

This letter also comes a day after crypto-foe and SEC chair Gary Gensler announced his upcoming resignation. 



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UK Government to Draft a Regulatory Framework for Crypto, Stablecoins, Staking in Early 2025

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The new Labour government, elected in July, intends to implement its predecessor’s crypto proposals on the creation of regulated activities, including operating a crypto trading platform and a market abuse regime, in full, Siddiq said. Under current plans, stablecoins will no longer fall under the U.K.’s payments regime. There will also be a carve out for staking to prevent it being treated like a collective investment scheme.



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Bitcoin

Bitcoin Approaches $100K; Retail Investors Stay Steady

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Bitcoin trades at $99,340.23, approaching the $100K mark as retail investors retain market dominance.

What is more interesting about this rally is the dominance of retail investors, who currently account for 88.07% of all Bitcoin (BTC) in circulation, according to The Block. Contrary to the recent claims that institutional investors are leaving retail investors behind in ownership of BTCs, the asset is still in the hands of retail investors, which underlines their stronghold in the market. This grassroots stronghold contrasts the much smaller shares held by whales at 1.26% and institutional investors at 10.68%.

Bitcoin edges at $100K while retail investors still hold the reins - 1
A heat map showing whales, investors and retail investors of Bitcoin. | Source: crypto.news

Adding momentum to BTC, the historic debut of BlackRock’s BTC ETF options witnessed $1.9 billion in notional value traded on the first day. It is a landmark news because it signifies growing institutional interest in BTC, yet lowers entry barriers for everyday investors. But there’s still some way to go, says Jeff Park, Head of Alpha Strategies at Bitwise Invest, in his observations on X about the ETF’s potential to reshape access to BTC. 

Jeff Park comment on BTC ETF

Bitcoin Breakdown:

How BTC ownership is distributed supports the overall trend of asset availability in the market. Companies such as Coinbase have substantial quantities of BTC, holding more than 2.25 million BTC. However, most of this is kept for their clients. Satoshi Nakamoto‘s wallet, which contains 96,8452 BTC, remains untouched as it played a role in creating the Genesis block.  

Overall, funds and ETFs account for 1.09 million BTC, or about 5.2%, while governments such as the U.S. and China collectively hold around 2.5%. 

Despite BTC witnessing price surges, the market is far from stable and often shows extreme volatility. For instance, on Nov. 21, the price of BTC dipped to $95,756.24, with trading volume reaching $98.40 billion. This volatility then reflects the vital role that retail investors play during price hikes, even as institutional investors become more active in the market. 

Some argue that BTC is becoming more centralized, but the data does not back this claim. Financial products like ETFs are attractive to institutions, but they also make BTC more accessible to retail investors. BTC continues to align with Satoshi Nakamoto’s vision of a decentralized and democratized financial system. As BTC nears the $100,000 threshold, its open-and-shut conversation that BTC’s ownership remains essential.





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