A report published by research firm CB Insights has found that equity funding has dramatically overtaken initial coin offerings (ICOs) as the dominant means of finance in the blockchain space.

While the largely unregulated ICO boom of 2018 raised $7.8 billion, initial coin offering funding fell more than 95% to raise $371 million in 2019. By contrast, equity funding raised $2.8 billion last year.

The report also notes the rise of decentralized finance (DeFi), noting that there are currently more than $1 billion in assets on DeFi platforms — up from $300 million as of January 2019.

Crypto firms are a major source of DLT funding

2019 saw 807 venture deals signed, only a slight drop from 2018’s 822. However, the total sum raised fell roughly 30% from $4.26 billion in 2018 to $2.79 billion last year.

VC activity is up significantly when compared with 2017 — which saw $1.25 billion raised from 297. However, the average sum raised by blockchain companies was higher in 2017 with $4.22 million — compared to $3.45 million in 2019.

The data also demonstrates “crypto companies’ commitment to funding their own ecosystem,” with NEO Global Capital and Coinbase Ventures comprising the two-most active VCs in the space during 2019.

Similarly, while hedge fund investment in blockchain is increasing, CB Insights attributes the funding to funds that specialize in cryptocurrencies.

U.S. share of blockchain funding share declines year-over-year

53% of global venture capital funding in distributed ledger technology (DLT) firms occurred in the United States and China last year.

While the combined share of Chinese blockchain funding has returned the same level as in 2015, investment has been steadily moving from the U.S. to China since 2015.

In 2015, U.S. blockchain funding represented 51% of the global total, compared to China’s 2%. In 2019, the U.S. accounted for 31% while China had grown to 22%.

However, 2019 also saw a rise in funding from emerging blockchain hubs, with both the U.S. and China seeing a slight decline in market share compared to 2018’s 34% and 27%, respectively. 2019 was the first year in which China’s share of global DLT funding decreased.