Business-to-business and software-as-a-service represent a rapidly growing sector of traditional industry. It should come as no surprise that it is equally important to the cryptocurrency industry – something that Fireblocks has made abundantly clear. In their most recent round of funding, Fireblocks raised $310 million in a Series D round, at an astounding valuation of $2 billion – making them one of the top digital custody firms in the sector.
The startup’s founders reiterated after this funding round that they wish to remain wholly independent – rather than become a subsidiary of a larger financial firm. Despite this, many traditional firms lined up for this most recent round of fundraising, including heavy-hitters like Sequoia Capital. This is after BNY Mellon supposedly hired Fireblocks to manage their newly created crypto-assets division. The trust that these financial institutions placed in Fireblocks makes it an attractive investment for others in the same space.
How Does Fireblocks Serve Institutions?
While crypto-investors tend to be more technologically savvy than their traditional counterparts, they still trend towards ‘exciting’ use cases. In contrast, Fireblocks is solidly business-focused, providing security and blockchain services that appeal mostly to larger, established firms. Fireblocks’ founders, Michael Shaulov, Pavel Berengoltz, and Idan Ofrat, began as cybersecurity experts – and it shows in their product line.
Security and rapid transfers feature prominently, but Fireblocks also offers tokenization and compliance assistance. More recently, they’ve begun looking into the decentralized finance niche, preparing a series of “whitelists” for large investors. The sheer volume of new tokens within the DeFi space makes it difficult to determine legitimate projects – something Fireblocks whitelist will help alleviate.
The Impact of Institutional Money
Attracting institutional investment proved elusive during the previous cryptocurrency cycle. Yet, their presence has grown substantially throughout the last year. JPMorgan will now offer access to cryptocurrency-related funds with Bank of America dipping their toes into trading as well. The introduction of such large players should help stabilize the industry over time – for better or worse.
Their entry also grants cryptocurrency a needed perception of legitimacy. Despite rapid advancements and major expansions, the general public remains dubious about blockchain technology. The average traditional investor has yet to fully grasp the advantages offered – or even the reason for cryptocurrency’s value in the first place. Larger firms opening crypto-trading desks will help to alleviate their fears – with Fireblocks helping to facilitate the endeavor.