EU’s Failure to Attract Top Crypto VCs: A Cause for Concern
- The lack of VCs has raised concerns about the EU`s competitiveness in the crypto industry.
- Regulatory uncertainty and lack of capital are alleged as major contributing factors to the concern.
Despite the growing interest in cryptocurrency and blockchain technology, the European Union (EU) needs to catch up in funding such projects. According to Patrick Hansen, the head of policy at Circle, only some of the top 25 crypto venture capitalists (VCs) are based in the EU, which raises concerns about the region’s competitiveness in the web3/crypto industry.
The lack of venture capital in the EU has allegedly been a persistent issue in the past, hindering the development of Web2/tech startups. This trend has carried over to the web3/crypto industry as well. While there are several reasons why the EU has been unable to attract top crypto VCs, regulatory uncertainty and lack of capital have been major contributing factors, according to some of the commenters in Hansen`s Twitter post.
Further, according to other commenters, the venture capital scene in the EU may not be as welcoming as it seems. While the region may provide excellent opportunities for startups with a profitable business model and product-market fit (PMF) that are ready to scale, securing funding for pre-seed rounds may take more work.
The EU’s lack of top crypto VCs is a cause for concern and calls for immediate action. According to cryptocurrency proponents, while the region has the potential to become a hub for blockchain technology and cryptocurrencies, it needs to provide a conducive environment for investment and growth.
In other related reports, the European Parliament reportedly approved the first Cryptoassets Regulation Act, which has been the subject of lengthy discussions and debates in recent months. After several consultations, 529 votes were cast in favor of the Act, with 29 against and 14 abstentions. This marks the first European legislation concerning crypto assets.