This column was co-written by Frank Chaparro, Special Projects Director at The Block, and Laura Vidiella of MNNC Group. The views expressed in this column are their own and do not necessarily reflect those of their employers.
My name is Frank. Greetings from the United Club Lounge. I am waiting for my flight out of San Francisco after a few weeks of traveling from New York to Jackson and finally to San Francisco. Recent events have got Laura and I thinking about crypto hubs.
San Francisco has been a technology hotbed since the early days of the semiconductor industry, with the biggest tech companies setting up shop here and raising capital from investors from Sand Hill Road to Market Street.
Many people believe that San Francisco’s tech scene is a relic of the pre-pandemic era, but I don’t think that necessarily means the 415 has lost its importance. It’s still an important place to visit and network with techies and capital allocators. I’ve also spent time north of the city in Sonoma and Napa, California, which is one of the most beautiful places in the world, blessed with stunning views and unparalleled weather. Plus, the wine isn’t bad! Scribe was a pretty cool place in Sonoma.
During a visit to a16z’s downtown office, I learned from conversations with the team that San Francisco doesn’t necessarily have a booming crypto scene. While most crypto investments are based in the US, the portfolio reflects the industry’s increasingly nomadic nature, with more and more companies springing up in Eastern Europe.
Likewise, DCG’s portfolio appears to be targeting new geographies, according to the company’s quarterly update. Founded by crypto magnate Barry Silbert, DCG reported 18 new investments in the first half of the year, up 125% year-over-year. These investments span the U.S., Europe (the U.K. and Germany), Africa (Nigeria, Egypt, and South Africa), Latin America (Mexico and Colombia), and Asia (Malaysia). A friend familiar with the company says their focus has shifted to emerging markets and the intersection of crypto and fintech, highlighting the global and cross-sectoral nature of the crypto industry.
This aligns with one of the clearest product-market fits in crypto: the ability of the technology to open up and improve accessibility to finance. As Tether’s Paolo Ardoino noted at TOKEN2049 in Dubai, “Europe doesn’t need stablecoins.” While not perfect, Europe already has a functioning banking and financial system. Emerging markets, on the other hand, have been quick to embrace the benefits of web3 technology, and this shift is increasingly reflected in venture capital trends.
Asia, long a hub for cryptocurrency mining and cross-border trading, is seeing a retail boom and a wave of conferences from Tokyo to Seoul to Singapore. Many of you will be heading to the continent for Korea Blockchain Week, TOKEN2049, and Solana Breakpoint.
As for deal flow, we had John Dantoni analyze the data, and here’s what he found:
Outside the United States:
- Africa and Oceania showed mixed trends, with Africa seeing an increase in deals but a decrease in funding, while Oceania saw a decrease in deals but a much higher amount of funding.
- Asia and Europe remain key markets, but growth is expected to slow slightly compared to 2023.
Overall, significant investment is being made outside the US, but North America still dominates. However, with increased transaction activity in Africa and increased funding in Oceania, there is a potential for more diversified investment across the region.
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