Investment in blockchain fell 54% from Q1 to Q4 2016
Investment in venture capital-backed blockchain companies dropped 54% between the first and last quarters of 2016, sliding from $153m to $69m. Despite the drop, there was an increase in deals from 14 to 17 between the third and fourth quarter. Venture capital database CB Insights says the drop in investment was likely to be due to the significant funding given to blockchain firm Digital Asset Holdings and other similar companies in the early months of 2016. Major investment banks such as Goldman Sachs, Banco Santander and Citi have all invested in eight fintech firms each over the past five quarters.

Funding to venture capital backed blockchain firms has more than halved since the first quarter in 2016 compared to the fourth, according to statistics from CB Insights.

Since the first quarter last year, funding plummeted 54% from $153 million to just $69 million in the fourth quarter.

Despite this, the number of deals increased to 17 in the fourth quarter last year, compared to 14 the quarter prior.

CB Insights explained funding surged in the first quarter last year off the back of blockchain firms like Digital Asset Holdings.

In January 2016, Digital Asset Holdings raised $50 million in global funding from major companies like JP Morgan, ICAP, BNP Paribas and Citi.

The next month, the funding figure rose to $60 million when Goldman Sachs and IBM joined the group of investors.

Discussing the investment at the time, Paul Walker, global co-head of technology at Goldman Sachs, explained the investment bank believes blockchain technology “will play a transformative role in the way financial institutions transact globally.”

Digital Asset Holdings claims its software has the potential to significantly improve post-trade processing efficiency and security, while reducing cost, latency, errors, risk and capital requirements.

CB Insights’ report also found major investment banks continued to back FinTech companies in 2016, with Goldman Sachs, Citi and Banco Santander topping the list of investors.

Over the last five quarters, the three investment banks each made eight investments in FinTech firms.