Investment: has the European Union become so attractive?

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 investment 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 a fortnight ago and we read it, crypto companies in the European Union attracted the most capital in 2023, even though the figures are down overall due to the Bear Market.

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In total, they captured 50% of the investments made worldwide over the first quarter, well ahead of North America (30%). The remaining 20% is mainly accounted for by the Middle East and Asia.

There are several reasons for this dynamic. Firstly, the projects. "There is no longer any doubt about the quality of projects and teams in Europe, particularly in decentralised finance and payments, 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's having a positive impact," stresses Ivan de Lastours, head of blokchain and crypto at Bpifrance.

Beyond these good figures, it's the question of the sustainability of this momentum that raises some questions. For while the European Union has its strengths, it is also benefiting from a favourable context with the US regulatory offensive. Investors are turning away from the United States, but that's only temporary," insists a German investor. Once things have calmed down, the Americans will go back to investing mainly in their market."

Other European players also point to the fact that the EU has overtaken North America because European funds were lagging behind. "The Americans raised in 2020 and invested a lot in 2021 and 2022, whereas the Europeans raised later, so they are investing more in 2023, but they won't be able to do it for long," explains a French business angel.