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From Boom To Gloom: Crypto VC Funding Takes A 68% Hit In 2023

Press Releases Crypto News Bitcoinist From Boom To Gloom: Crypto VC Funding Takes A 68% Hit In 2023

The crypto industry in 2023 witnessed a significant reduction in venture capital (VC) funding, experiencing a 68% drop compared to the previous year. Despite this downturn, the $10.7 billion invested in 2023 surpassed the amounts recorded in previous bear markets.

The year’s total investment notably exceeded $3.1 billion in 2019 and $3.2 billion in 2020, according to a report, signaling that while the landscape has cooled, it remains more active than in past down periods.

The Recorded Shift In Crypto VC Investment Trends

2023 witnessed venture capitalists directed their focus towards crypto and blockchain startups, contributing $10.7 billion, a stark contrast to the $33.3 billion boom in 2022. The majority of these investments were made in Q1 of the year, with a noticeable slowdown in the second half of the quarter.

However, according to the report, November marked an unexpected increase in funding. Interestingly, the year saw a shift in the allocation of deals, with increased support for early-stage startups such as pre-seed, seed, and Series A, while “mid and later-stage investments” saw a decrease.

Despite a general slowdown, certain sectors within the industry continued to attract significant attention. Sectors such as Web3, non-fungible tokens (NFTs), gaming, and infrastructure continued to lead in the number of deals, while sectors like data analytics, trading platforms, and enterprise solutions experienced a reduction in deal frequency.

The year 2023, while not matching the investment fervor of 2022, still ranks as the third highest in terms of total funds invested in the crypto sector.

Amount raised in crypto over the years. | TheBlock

Experts like Abhishek Saxena, principal lead at Polygon Ventures, have contextualized the downturn as a result of “macroeconomic factors, regulatory uncertainties,” and the repercussions of recent maj

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Author: Samuel Edyme

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