According to Blockstream CEO Adam Back, initial coin offerings (ICOs) may have hindered the development of the Bitcoin ecosystem. Back highlighted the significant investment bias towards non-Bitcoin projects by venture capitalists over the past five years.
Market research conducted by Trammell Venture Partners revealed that 97% of venture capital investments flowed into “crypto” rather than Bitcoin. Back noted that ICOs, altcoins, and discounted tokens attracted investors but often did not result in usable and valuable products reaching the market due to misaligned incentives.
Back emphasized that while the Bitcoin space was being underfunded by this category of investors, builders within the ecosystem were producing more innovation and product value compared to ICOs and other crypto projects.
The failures of FTX and decentralized finance projects like Terra/LUNA may have contributed to a shift in VC funding behavior, with renewed interest observed in Bitcoin startups. Back also mentioned that Bitcoin-related startup investment had doubled in the past year, indicating positive growth in the sector.
In a separate development, Twitter co-founder Jack Dorsey, a proponent of Bitcoin, donated $5 million to Brink, a nonprofit organization supporting Bitcoin developers.
Blockstream and Lightning Labs, led by Back, are recognized as significant contributors to the ongoing development of the Bitcoin protocol, with both companies employing eight developers dedicated to maintaining the cryptocurrency.