Pedestrians pass a Fidelity Investments office in Boston, Massachusetts. Photographer: JB Reed/ … [+]
The continued growth and expansion of blockchain technology and cryptocurrency into the mainstream and enterprise space has accelerated the desire for stronger and more robust analytics in the industry. The technology alone makes it quite amenable to the analysis of the tokens and transactions on different platforms, and firms like Coin Metrics look to be providers of such data.
The Boston-based blockchain data firm Coin Metrics has thus closed a $6 million Series A funding round that was led by Highland Capital Partners with participation from Coinbase, Fidelity, Castle Island Ventures, and others.
Highland Capital Partners has 271 companies in its early-stage investment fund portfolio and was founded in 1988. Its main focus is on tech, having backed Ask Jeeves search engine during the dot.com boom. It clearly sees the potential in blockchain technology but has focused on deep analysis with this funding.
More so, Fidelity has also shown its liking to the blockchain and cryptocurrency space having launched a stand-alone company dedicated to bringing cryptocurrencies to institutional investors. It is called Fidelity Digital Assets, and provides enterprise-grade custody solutions, a cryptocurrency trading execution platform and institutional advising services.
About improving crypto data
For some of these major investors, such as Highland Capital, the funding represents a chance to improve the quality of crypto data. One of the principals of Highland Capital, Sean Judge, explained:
“Financial institutions require clean and transparent data to make decisions. These same requirements exist for Bitcoin and other crypto assets that have emerged over the last decade. It’s become clear that Coin Metrics is the premier destination for network and market data.”
For Coin Metrics, the money will be used by them to grow their team, and to expand its product offering.
“Our ability to distil operational and economic activity occurring on a blockchain network, by running full nodes and performing deep analytics, is imperative for broader institutional investment in this space. Recent crypto asset volatility and the insights we have been able to provide customers highlights the importance of the work we are doing,” commented Tim Rice, CEO of Coin Metrics.
Drawing deeper interest from institutions
It is interesting to note the high degree of institutional interest that is coming to Coin Metrics and its blockchain analysis work. The likes of Highland Capital and Fidelity are major players in the traditional space, and the addition of Coinbase’s interest from a cryptocurrency community standpoint is also pleasing.
Rice has noted how there has been growing interest in their business from institutional investors.
The foundation we’ve laid to become a provider to traditional capital markets is a key advantage for Coin Metrics, as assets like Bitcoin continue to draw interest and investment from these institutions”, said Rice. “These firms have strict due diligence processes before onboarding a data provider, and I am happy to say we have been able to meet their requirements. This is a major hurdle for any vendor, much less a start-up, and is key to our continued success.”
A clearer picture
The idea of having reliable and true data based on this nascent space is undoubtedly something that will be attractive to enterprise companies. Coin Metrics delivers mature data across multiple formats to various industry stakeholders, including financial enterprises, funds, media and research outlets, and data/application providers. This data can empower users of the blockchain space to better understand, value, use, and ultimately steward public crypto networks.