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With fear of missing out on the crypto wave, VC investment in such projects totalled $10 billion globally in the first quarter of this year, the largest quarterly sum ever and more than double the level seen in the same period a year ago, according to data from Pitchbook.]
Crypto investment was once a tepid toe in the water, but VC interest has surged in 2021. Full-year totals for 2019, 2020 and 2021 were $3.7 billion, $5.5 billion, and $28 billion.
"You're seeing a lot of VC investment into a lot of protocols because they all believe, as we do, that some of these protocols are the infrastructure of the future," said Steve Ehrlich, CEO of crypto brokerage firm Voyager Digital.
Old school investor Warren Buffet, however, feels very differently about crypto as an investment.
Asked at the annual Berkshire Hathaway shareholders meeting if Buffet had changed his famously negative views on bitcoin or crypto, the 91-year-old investor didn’t mince his words.
Buffett began his answer by saying that if all the attendees in the room owned “all the farmland in the United States” or “all the apartments in the country” and they offered him a 1% stake for $25 billion, he would write them a check on the spot. But he wouldn’t do the same for bitcoin and its over-$700 billion market cap. He then added, “If you ... owned all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it,” Buffett said. “Because what would I do with it? I’ll have to sell it back to you one way or another. It isn’t going to do anything.”
The U.S. government has been increasingly attempting to regulate and tax crypto as it becomes more widely used. A recent report from the Biden administration outlines proposed legislation that would bring more regulation to the cryptocurrency market.
