The big shift in venture capital funding away from crypto projects has come into stark focus.

A comparison between this and last year’s Q1 funding shows a drop from $9.1 billion during the first three months of 2022 to $1.7 billion in 2023, an 82% fall, according to a Crunchbase report.

However, while the dip in deal flow and sector funding harken back to or below levels last seen in Q4 2020, Delta Blockchain Fund Founder Kavita Gupta told Decrypt that there are many factors at play.

“There are multiple things happening. We are seeing more and more companies who have raised at a very high valuation in 2021 or early 2022 that are now coming back into the market trying to do extensions at the same valuations, which are not going through. So a lot of companies are doing their down rounds,” said Gupta.

Those high valuations were driven by companies such as Yuga Labs, ConsenSys, Polygon, as well as FTX and FTX US—all of which raised between $400 million and $450 million in 2022.

Reduced deal flow

In today’s market, the sword now cuts the other way. Where major institutions like FTX and Silvergate Bank once st

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Author: Jeremy Nation

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