Cryptocurrency investments hit $1 billion in May with Ethereum dominating: KuCoin

The KuCoin exchange's research arm published a report on cryptocurrency performance in May, noting $1 billion in new investments, a slight decrease from April.

The report highlighted that institutional investors predominantly favored ethereum and EVM-focused platforms during this period.

$1 billion in investment

Earlier this week, KuCoin Research published a report indicating that in May alone, the cryptocurrency space saw public disclosure of around 156 investments. The total amounts invested in the 156 projects amounted to approximately $1.02 billion.

The report indicated that investment figures for May were approximately $70 million lower than the previous month, representing a 6.4% decrease from April's $1.09 billion. However, on a broader scale, the latest figures show an increase of 10.61% compared to May 2023, which saw $905 million in disclosed investments. The report highlights that this new investment reflects “the continued capital interest and development potential in the industry.”

More than 50% of the projects received financing between 1 and 10 million dollars. ethereum, EVM chains, and L2 networks like Arbitrum and Polygon were the most favored by institutional investors. Among non-EVM chains, Solana led institutional investment, followed by bitcoin, Fantom and TON, which were also among the 15 networks that attracted investor interest in May.

Major Chinese institutions remained very active, investing in emerging technologies and public chain networks. For example, Animoca was involved in about 15 deals, while OKX invested in 11 projects. Others such as Cogitent Ventures, SNZ Holdings, DWF Labs, Polygon Ventures, MH Ventures, Haun Ventures, Waterdrip Capital and GBV Capital were also in the top 10.

Modularity, Layer 2 (L2) solutions, and Liquid Staking Derivatives (LSD) were the most popular narratives favored by these institutional investors.

For example, the report found that: “There is a strong will among institutions to promote the exit of projects through public contributions.” This came as data revealed a decline in the proportion of Series A funding projects from 10% to 7.77%, while strategic funding projects increased from 15.73% to 18.45%.

Major dynamic shift in investor focus

According to the report, investors shifted their attention towards memes, celebrity tokens, emerging narratives, and low market cap assets. Tokens launched at extreme valuations and limited supplies led investors to explore alternative investment options. Notcoin emerged as one of the main beneficiaries of this shift in investor preferences.

Additionally, the report highlighted that recent regulatory developments in the United States have significantly impacted the legal and operational landscape of the crypto market. These changes have introduced new challenges and considerations for investors and market participants, influencing their investment strategies and decisions.

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