By Tom BlitzerKey Insights:
- Limited crypto venture capitalists in the EU raise concerns about its ability to compete in the web3/crypto sector.
- Regulatory instability and insufficient funds are significant factors that hinder investment in the EU’s crypto industry.
- The EU must establish a favorable climate for financial backing and expansion to become a leading blockchain innovation and crypto center.
Despite the burgeoning curiosity surrounding blockchain technology and cryptocurrency, the European Union (EU) must catch up in financing such initiatives. Circle’s policy chief, Patrick Hansen, has highlighted that a limited number of the most influential crypto venture capitalists (VCs) are located in the EU, which raises doubts about the region’s ability to compete in the burgeoning web3/crypto sector.
Not a single one of the top 25 crypto VCs is based in the EU 🇪🇺
The lack of venture capital has been one of the many reasons why the EU has fallen behind in Web2/tech.
Unfortunately, this picture has hardly changed for web3/crypto. pic.twitter.com/PuoJdH29Ta
— Patrick Hansen (@paddi_hansen) May 2, 2023
EU struggles to attract crypto investors
Reportedly, the European Union has faced a long-standing problem of inadequate venture capital, which has impeded the growth of Web2/technology startups. The deficiency of investment opportunities has also affected the web3/cryptocurrency industry. Experts have attributed the EU’s inability to lure leading crypto venture capitalists to a combination of factors, with regulatory instability and insufficient funds being the most significant, as stated by commentators in Hansen’s tweet.
Additionally, as per the perspectives shared by some other reviewers, the European Union’s venture capital landscape may not be as hospitable as it appears. Even though the area can offer favorable prospects for new businesses with a lucrative business strategy and a viable product-market fit (PMF) and is prepared to expand, obtaining financial support for initial seed funding rounds may require extra effort.
EU’s crypto future needs investment support
The absence of prominent cryptocurrency venture capitalists in the European Union (EU) raises alarms and requires prompt intervention. Advocates of digital currencies argue that despite the EU’s ability to emerge as a leading center for blockchain innovation and crypto, it must establish a favorable climate for financial backing and expansion.
According to additional sources, the initial Cryptoassets Regulation Act has allegedly been given the green light by the European Parliament. The Act, the topic of extensive talks and disputes over the past few months, was approved with 529 votes in favor, 29 against, and 14 abstentions following numerous consultations. This signifies the first time that European legislation has addressed crypto assets.