In May, KuCoin exchange’s research arm released a report on the performance of cryptocurrencies, indicating that there was a notable decrease in new investments compared to April. The report highlighted that institutional investors showed a preference for Ethereum and EVM-focused platforms during this period.
During the month of May, the crypto industry witnessed the public disclosure of approximately 156 investments, totaling around $1.02 billion. This figure represented a 6.4% decline from the previous month’s total investments of $1.09 billion. However, in comparison to May 2023, there was a 10.61% increase in disclosed investments, signaling ongoing capital interest and developmental potential in the industry.
The report revealed that over 50% of the projects received financing ranging from $1 million to $10 million. Institutional investors showed a strong favor towards Ethereum, EVM chains, and Layer 2 networks like Arbitrum and Polygon. Among non-EVM chains, Solana led in institutional investment, followed by Bitcoin, Fantom, and TON. Chinese institutions played a significant role in investing in emerging technologies and public chain networks, with entities like Animoca and OKX being highly active.
Modularity, Layer 2 Solutions, and Liquid Staking Derivatives were the most popular narratives among institutional investors. These investors expressed a strong interest in pushing for project exits through public listings. The report indicated a shift in the proportion of Series A financing projects, with a decrease from 10% to 7.77%, while strategic financing projects increased from 15.73% to 18.45%. Investors also redirected their focus towards memes, celebrity tokens, emerging narratives, and low market cap assets.
The influx of tokens with extreme valuations and limited supplies prompted investors to explore alternative investment options. Notcoin emerged as a significant beneficiary of this shift in investor preference. These changes have introduced new challenges and considerations for investors and market participants, influencing their strategies and investment decisions.
The cryptocurrency investment landscape in May presented opportunities and challenges for investors. Institutional interest in Ethereum and EVM-focused platforms continued to be strong, with Chinese institutions playing a notable role in the market. The emergence of new narratives and investment preferences reflects the evolving nature of the crypto industry, requiring investors to adapt and diversify their portfolios accordingly.