Crypto projects raised over $4m despite US banking crisis

Despite growing concerns in the United States banking industry, the crypto industry stands firm, raising over $4m through token sales last week.

On Mar. 19, CryptoRank data revealed that despite a contraction, the amount raised had increased significantly; showcasing the resilience and adaptability of the crypto industry.

Collapse of major US banks affects the crypto industry

The data showed that the crypto industry raised $4.11m through token sales, despite decreased token sales the previous month.

The total raised in the last two months totaled an impressive $6.89b, up from last month’s $933.55m, including private rounds.

This is against the backdrop of the collapse of major banks Silvergate, Silicon Valley Bank (SVB), and Signature Bank, which exposed the vulnerability of the traditional banking sector while temporarily depriving the U.S. crypto market of its primary fiat on-ramps.

Analysts have attributed the collapse of SVB and Silvergate to unfavorable market conditions and poor risk management. SVB’s downfall resulted from overexposure to long-term government bonds, which depreciated when interest rates rose. This left the bank short of assets when many depositors withdrew their funds simultaneously.

Silvergate’s collapse was fueled by FTX’s meltdown, damaging trust in the crypto sector, and short sellers airing concerns on Twitter.

Signature Bank’s shutdown stirred controversy as it was reportedly not insolvent and had already stabilized its capital outflow when U.S. regulators intervened. Many crypto enthusiasts saw this as a politically-motivated move to push crypto out of the U.S.

With the collapse of Silvergate and Signature Bank, the two major financial institutions providing banking services to U.S. crypto companies, it was widely believed that crypto companies would face major hurdles interacting with the dollar-based financial system. However, the recent fundraising success suggests otherwise.

Fundraising methods: ICOs, IEOs, and IDOs

Initial Coin Offerings (ICOs), Initial Exchange Offerings (IEOs), and Initial Decentralized Offerings (IDOs) are fundraising methods that differ in structure and execution but share similar goals.

ICOs enable companies to raise funds by creating new coins, apps, or services. IEOs involve online trading exchange platforms conducting digital asset offerings on behalf of companies, providing immediate trading opportunities. IDOs, the latest fundraising model, offer enhanced liquidity and are issued by decentralized exchanges.

Bitcoin (BTC), the largest cryptocurrency in the world, experienced a tumultuous journey, hitting an all-time high of nearly $69,000 in November 2021 before dropping to below $20,000 in March 2023. 

Despite the banking crisis, bitcoin has climbed back up, trading at around $27,740 at the time of writing. CryptoRank.io data indicates that Binance leads Bitcoin and Ethereum markets in daily futures volumes.