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To measure the dynamism of a crypto ecosystem, there are several criteria: the number of users, the number of start-ups, and of course the share of investments it has attracted. For several years, North America, led by the United States, has been the best at this little game, but things seem to be changing.
According to the latest report from investment firm Pitchbook 🇺🇸, the report came out two weeks ago and we read it, crypto companies in the European Union attracted the most capital in 2023, even though the numbers are down overall due to the Bear Market.
In total, they captured 50% of the investments made worldwide in the first quarter, far ahead of North America (30%). The remaining 20% of investments were mainly in the Middle East and Asia.
This dynamic can be explained by several factors. First, the projects. "The quality of projects and teams in Europe, especially in decentralized finance and payment, is no longer in doubt, and foreign investors are well aware of this," explains Julien Bouteloup, founder of crypto investment fund Stake Capital.
Without naming them all, Morpho, Angle, Mangrove, Rise, Swaap Finance and other start-ups have attracted capital from both the EU and, of course, the US and Asia.
Regulation obviously also plays a (very) big role in this dynamic. "It's even the major point," explains a French investor. With the arrival of MiCA (Markets in Crypto-Assets), several foreign investment funds see the European Union as a market where companies will succeed in thriving. "The rules are clearer, there is visibility, so it has a positive impact," emphasizes Ivan de Lastours, head of blokchain and crypto at Bpifrance.
Beyond these good figures, it is the question of the sustainability of this dynamic that raises some questions. For while the European Union has its strengths, it is also benefiting from a favorable context with the American regulatory offensive. Investors are turning away from the United States, but this is only temporary," insists a German investor. Once things have calmed down, the Americans will start investing in their market again.
Other European players also point to the fact that the EU has overtaken North America because European funds were late. "The Americans raised in 2020 and invested a lot in 2021 and 2022, while the Europeans raised later, so they are investing more in 2023, but they won't be able to do it for long," says a French business angel.