• Asia and Africa gained prominence for new crypto startups in early 2024, while Europe’s dominance has grown, and the U.S. and Canada have seen declines due to regulatory uncertainties.

• U.S. regulatory issues push crypto startups to explore Asia and Africa for more precise, more supportive regulations.

• New African Crypto startups are generally founded by small teams (2-5 individuals) rather than single founders, suggesting a collaborative approach to challenging blockchain challenges.

Asia and Africa have emerged as new powerhouses in the crypto industry. Researchers believe this shift is due to regulatory uncertainties in the U.S. and increased crypto adoption in emerging markets.

The first half of 2024 saw a notable change in the geographic distribution of new crypto ventures.

African Crypto Startups: New Crypto Startups Hotspots Emerge in Asia and Africa in 2024

According to blockchain startup accelerator Alliance DAO data, Europe has taken the lead, capturing 31.4% of the market share. This marked a significant change as Europe overtook the traditional leaders, the United States and Canada, which now account for 29% of new startups.

Asia secured the third position with a 26.8% share, while Africa’s representation increased to 5.2%, just below Latin America. Oceania, mainly comprised of Australia and New Zealand, accounts for 1.8% of new crypto startups.

Alliance DAO’s Qiao Wang and “Chloexyg” attribute these trends to regulatory uncertainties in the U.S., which have prompted entrepreneurs to seek more favorable conditions elsewhere. Increased adoption of digital asset applications in emerging markets has also played a crucial role in this shift.

The same regulatory uncertainties cited by Alliance DAO have forced self-custody service providers such as Phoenix Wallet and Wasabi Wallet to exit the U.S. market. Other firms have expanded their operations to more crypto-friendly jurisdictions.

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Many industry insiders have criticized the U.S. Securities and Exchange Commission’s regulation-by-enforcement approach, viewing it as a significant factor in these market shifts.

Emerging Crypto Hotspots: Asia and Africa

The share of cryptocurrency startups launching in Africa and Asia has reached its highest levels in the first half of 2024, as regulatory uncertainties in the U.S. continue to drive startups to other regions.

According to a July 10 X post by blockchain startup accelerator Alliance DAO, Europe overtook the U.S. and Canada as the leading place for new cryptocurrency startups in H1 2024, making up a 31.4% share. Asia came in third place with a 26.8% share.

Africa also saw its share rise to 5.2%—slightly below Latin America—while Oceania saw only 1.8% of the total crypto startups in the year’s first half. Many believe the trend is due to the increased adoption of digital asset applications in emerging markets.

Alliance DAO compiled this data through the 3,000 annual applications it receives for its blockchain startup accelerator program.

“Because of the sheer sample size and the fact that we are relatively agnostic to these factors, we can derive unique insights into where the industry is heading,” said the team. This data confirms that African and Asian crypto startups are capitalizing on new opportunities created by regulatory uncertainties in more traditional markets.

Team Dynamics and Founder Backgrounds

The impact of regulatory uncertainties in the United States is evident not just in the geographic distribution of crypto startups but also in the backgrounds of their founders.

According to Alliance DAO’s data, the number of startup founders coming from Big Tech firms has fallen by more than 15 percentage points since 2021. A similar decline is observed among founders of the top 100-ranked universities.

Most teams of 2-5 members launch most new crypto startups (51%), while solo founders account for 39% of new ventures. This trend underscores a shift towards collaborative efforts in crypto, likely in response to blockchain technology and regulation’s complex and rapidly changing landscape.

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Alliance DAO’s large sample size and unbiased approach provide invaluable insights into industry trends. The data reveals that most new startups are being launched by small teams rather than solo founders. Additionally, the professional backgrounds of founders have shifted, with fewer entrepreneurs hailing from Big Tech firms or top 100-ranked universities.

The same regulatory uncertainties impacting market distribution have also influenced the operational decisions of self-custody service providers like Phoenix Wallet and Wasabi Wallet, which have recently exited the U.S. market.

This trend highlights the broader implications of regulatory pressures on the industry as firms seek more favorable environments for growth and innovation.

Alliance DAO’s findings emphasize the crucial role of blockchain startup accelerators in navigating these challenges. By providing resources and support, these accelerators help startups adapt to changing regulations and capitalize on new opportunities.

Conclusion

The first half of 2024 has seen significant shifts in the landscape of African crypto startups and those in Asia, driven primarily by regulatory uncertainties in the United States. Europe has emerged as the leading region for new crypto ventures, with Asia and Africa not far behind.

This trend is supported by blockchain startup accelerator Alliance DAO data, highlighting emerging markets’ growing importance in the global crypto industry.

The impact of these changes extends beyond geographic distribution, affecting team dynamics and founder backgrounds as well. The decline in founders from Big Tech firms and top universities suggests a more diverse and collaborative approach to entrepreneurship in the crypto space.