The UK has long been a haven for startups, with thousands of investors just looking for the right project to nurture, as well as a culture of the general public taking an interest in promising new companies. This is no different for cryptocurrency startups, of which the UK has seen many.
Cryptocurrency startups are companies that are built on a blockchain, which is a ledger that keeps track of digital peer-to-peer transactions like cryptocurrency and NFTs. While the focus of creating a blockchain company is often on creating a new cryptocurrency, there are many different kinds of crypto startups that you can find, ranging from NFT collectibles, gaming platforms, or even NFT marketplaces. The key is that they’re built on a decentralized network using digital currency.
Crypto Startups in the UK
The UK already has a reputation for launching startups into the mainstream, but in recent times this reputation has transferred to cryptocurrency startups too. Just this year, UK-based crypto startup BVNK raised £32 million in investments, despite the uncertain picture of the markets at the moment. BVNK provides financial services to businesses using cryptocurrency, with them stating that their aim is to “bridge the gap” between digital and traditional assets.
Additionally, UK-based blockchain.com was named one of the most successful UK technology companies ever, let alone on the blockchain. The platform allows users to hold trade and manage their crypto assets in one place. Since its launch in 2014, they’ve become one of the most successful blockchain companies in the UK.
Technology Startups in the UK
Cryptocurrency is just one of many emerging markets to see some incredible UK-based startups taking off in recent years. Artificial intelligence has seen a whopping £9.77 billion equity investment since 2011, across 3500 funding rounds. OneTrust, based in London, managed to secure almost £700million in just 4 funding rounds. Founded in 2016, OneTrust develops artificial intelligence software that helps users to manage their security. Very quickly after launch the company has named a unicorn, and has gone on to also become one of the most successful unicorns in the UK.
One sector that goes hand-in-hand with cryptocurrency and the launch of the metaverse is virtual reality, which has seen a huge surge in popularity again thanks to the talk of web 3.0. A huge number of VR startups have launched in the UK in the last few years, and 2021 saw the strongest 12 months of fundraising in the industry since records began. Investors poured £154million of their capital into the VR sector, up 72% in 2020. VR revenue is projected to increase by more than 30% over the next 5 years, in part thanks to the launch of the metaverse.
There’s no question that the cryptocurrency market is booming. As more of us choose to be more involved with internet technology interest in the metaverse is booming, cryptocurrency is becoming more mainstream and there is a lot of room for new startups to flourish. Several blockchain startups have become unicorns; others have taken the slower route but still become successful companies in their own right, proving that the cryptocurrency business model is a success. Having said that, there’s also a lot of room for scammers at the moment due to a lack of regulation, which is something people will be keen to stop.
The Rise in Cryptocurrency Popularity
Earlier in the year, the UK government announced that it would be moving towards the crypto space, starting with a launch of their own NFTs as well as HMRC becoming more adept at dealing with assets held in digital currencies. The government has admitted that they need to do more to tackle crimes in the digital space – currently, they consider crypto assets as personal property but there are no specific laws and it’s not considered legal tender.
Regulating Crypto in the UK
The UK Government could bring in legislation that will regulate the crypto industry, much like gambling legislation has affected instant withdrawal casinos and this is certainly something that those in the startup sector will want to pay attention to. That doesn’t mean that regulation has to be a negative thing, for many people within the online casino industry it is seen as a positive, with players and casinos protected. However, people will be conscious that one of the selling points when it comes to Crypto-assets is their unregulated and anonymous nature, so any regulation that changes this could affect the overall popularity of Cryptocurrency.
The UK is set to announce a package of potential regulations in the coming months, but the EU is ahead. They’ve said that once new regulations come in, issuers of Cryptocurrencies in the EU have to publish a white paper, and any services related to crypto-assets will have to obtain approval from one local authority to operate in the EU. Even though the need for regulation the UK has been slow to act, there’s no way of knowing what regulations might come in in the near future.
Cryptocurrency Investments
Over recent weeks we have been reminded once again how volatile the cryptocurrency market can be – with big-name digital currencies taking a dive in value. Of course, that doesn’t mean that people shouldn’t get involved in Cryptocurrency startup ventures but it does mean that going into it was your eyes open and as much knowledge as possible is essential. Unlike other types of investment, we don’t have a long history to look back on and predict how investments might perform moving forward. Anyone interested in launching a crypto startup needs to ensure that they keep on top of crypto-asset news & that they are doing what they can to ensure the smooth running of their own venture. That said, 2022 is definitely the year where people are starting to get involved, which is a really exciting thing for the industry and no doubt in a few years there will be plenty of people boasting that their success story comes from being one of the first involved in crypto start-ups, so let’s see how that all pans out.
