Binance, which is the world’s largest crypto exchange by trading volume, has raised $500 million for a fund that will invest in Web3 despite the current bear market.

According to a report by CNBC published on June 1, Binance Labs, the venture capital arm of Binance, has “raised $500 million for its debut start-up fund, securing backing from venture capital firms DST Global and Breyer Capital as well as unnamed family offices and corporations.”

Despite the new funds appearing across the industry, the crypto markets appears to be entering a bear cycle. As noted in the report, Bitcoin has plunged more than 50% since reaching its all-time high near $69,000 last November. Coinbase, a leading U.S.-based exchange, has watched its shares decline 69% since the start of the year. 

Ken Li, Binance Labs’ executive director of investments and M&A, told CNBC:

“We are looking for projects with the potential to drive the growth of the Web3 ecosystem.”

CNBC’s report pointed out that although Binance has “made a series of high-profile equity investments in the past year,” this marks “the first time the company has formally raised a VC fund with financing from external investors.”

It is worth mentioning that Silicon Valley-based venture capital firm Andreessen Horowitz (“a16z”) announced on May 25 the launch of a $4.5 billion fund since they believe that “we are now entering the golden era of web3.”

In its blog post, a16z said:

“We think we are now entering the golden era of web3. Programmable blockchains are sufficiently advanced, and a diverse range of apps have reached tens of millions of users. More importantly, a massive wave of world-class talent has entered web3 over the last year. They are brilliant and passionate and want to build a better internet.

“That’s why we decided to go big. We’ve been investing in crypto since 2013, and today we’re announcing our fourth crypto fund, totaling $4.5B. Of that, approximately $1.5B will be dedicated to seed investments, and $3B to venture investments. This brings our total crypto/web3 funds raised to over $7.6B.“

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Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.