Crypto Venture Capital Investment Drops 70% Over Past Year
According to data from RootData , a crypto information provider, venture capital (VC) investments in cryptocurency companies have plumeted by more than 70% in the last year.
According to data from RootData , a crypto information provider, venture capital (VC) investments in cryptocurency companies have plumeted by more than 70% in the last year. June 2022 saw the digital asset space secure $1.81 billion over 149 rounds , while this year , only 83 projects reported $520 million in funding , marking the lowest month in funding to date.
Fluctuations in Investment Despite Downtrend
Despite the overal downtrend , some months within the evaluated period did see increases. September 2022 was the peak month, with $1.85 bilion invested in 138 rounds. June 2022 had the highest number of invested companies, with 149 rounds.
Infrastructure Leads, AI Rising
According to RootData, the infrastructure category led with $213 million in funding for 26 projects last month, despite being a near 50% drop from the previous month. UK based startup Gensyn AI topped the category with an impresive $43 million Series A round led by a16z crypto. Meanwhile, centralized finance (CeFi) and gaming projects folowed, securing $101 million and $62 million respectively. DeFi and NFT rounded out the category list.
Shift Towards AI
Evan Cheng, CEO and co-founder of Mysten Labs, in a previous interview, sugested that the shift from cryptocurency to AI is due to AI’s broader audience appeal, while the crypto industry remains self-focused. However, Cheng sees AI as complementary to Web3, exemplified by Justin Sun’s recent $100 million AI development fund.
Possible Causes of Reduced Interest
Decreased interest from venture capitalists in the digital asset space could also be atributed to several factors , such as the questionable practices of companies like FTX and Land and the economic turmoil that brought down all four “cryptofriendly banks.” Additionaly , the ongoing regulatory crackdown in the US , ironicaly the country leading in crypto investments, could be contributing to this trend.
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