Blockchain, Crypto Funding Drops Off In Q4
2022 will be remembered as a difficult year for crypto, with a drop in VC funding flowing into the blockchain and crypto sectors mirroring the bleak market conditions.
According to a Blockdata report, there will be consecutive quarterly drops in funding through 2022, following a surge in VC funding into the wider Web3 space through 2021.
Blockdata rounded out 2022’s final quarter of venture capital funding value by analysing CB Insights data, noting a 34% decline from Q3 2022. When compared to the first and second quarters of the year, the fourth quarter fell by 67% and 53%, respectively.
Following an all-time high of $11 billion in investments and 692 deals in the first four months of 2022, VC investment fell every quarter.
As a result, VC funding fell 61% in Q4 2022 to $3.7 billion, down from $9.6 billion in Q4 2021. Total funding for blockchain and cryptocurrency startups fell 11% year on year, from $32 billion to $29 billion.
As a positive takeaway, Blockdata notes that the volume of deals in 2022 will increase by 35% over 2021. According to the firm, despite a drop in venture capital spending, investors are still looking to fund blockchain-based technologies, applications, and startups.
Venture capital investments are shifting towards “non-volatile innovations,” such as cross-chain bridges, payments and remittances, lending, decentralised autonomous organisations, asset management, and digital identity management, according to the report.
Q4 still produced some sizeable VC investments. Amber Group netted the highest funding, raising $300 million in a Series C round in December 2022 to tackle drawdowns of specific products affected by the FTX debacle.
(With inputs from Shikha Singh)
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