Binance Raises $500 Million Fund for Crypto Investments

The fund plans to invest in startups across the crypto space. Since 2018, Binance Labs has invested in about 100 startups including Axie Infinity, Polygon and Dune Analytics.

Some of the fund will go toward a program designed to help startups launch. The rest will go to companies that are focused on so-called Web 3 activities such as decentralized finance, nonfungible tokens and the metaverse.

The announcement of the new fund comes a day after Binance called off a planned $200 million acquisition of the U.S.-based media company Forbes Global Media Holdings through a special-purpose acquisition company. Binance announced that deal in February.

Bitcoin and its crypto peers have fallen into a bear market since last year. The market value of the entire sector has fallen from a peak of $3 trillion in February to about $1.3 trillion now, according to CoinMarketCap.

Bitcoin fell 31% this year through May, and 53% from its Nov. 9, 2021, record of $67,802, according to Dow Jones Market Data. It has had five selloffs that were deeper, according to research firm Visual Capitalist, and three that have lasted longer.

Despite that backdrop, crypto firms have been more resilient in terms of capital raising than the rest of the private market. Crypto and blockchain-based companies have raised about $15 billion so far this year, according to PitchBook. That is roughly at the pace of 2021, when the sector raised $32 billion.

Last month, the Silicon Valley firm Andreessen Horowitz announced a $4.5 billion crypto fund, its largest to date. The firm has about $28 billion worth of investments, with about $12.7 of capital it raised but has yet to use, according to PitchBook.

Capital raising for the rest of the fintech sector has slowed in 2022, though. Fintech companies raised $29.3 billion from venture capital in the first quarter, according to PitchBook, down 7.3% from the fourth quarter of 2021.