Despite the fact that the sector is shivering in the cold, venture capitalists are pouring money into digital currency and blockchain startups at an unprecedented rate.
According to PitchBook, VCs invested $17.5 billion in startups like these in the first half of the year.
Bitcoin and other cryptocurrencies are on track to outperform last year’s $26.9 billion in investment, which occurred during a happy and prosperous period for the industry.
“I don’t think the current market conditions faze investors,” said Roderik van der Graf, founder of Lemniscap, a Hong Kong-based cryptocurrency and blockchain investment firm.
There’s A Lot Of Money Floating Around
Venture capital funds (VCFs) invest in young companies with high growth potential.
Although cryptocurrency and blockchain technology had a difficult first half of 2018, data shows that investors are still optimistic about the future.
In contrast, the crypto-crisis has not had the same impact on all investors.
Although the revolutionary changes promised by technology to industries such as finance and commodities have yet to materialize, cryptocurrency adoption as an investment tool skyrocketed last year.
In January 2022, the US arm of cryptocurrency exchange FTX raised $400 million.
In March 2022, blockchain developer ConsenSys raised $450 million, and stablecoin issuer Circle raised $400 million a month later.
In the first half of the year, Europe received $2.2 billion in venture capital funding.
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North America was once again a hotbed for venture capital deals in the first half of this year, with $11.4 billion invested in the six months to June, down from $15.6 billion invested in the entire year before.
Due to macroeconomic and market turmoil, venture capital deals totaled $144.2 billion in the first half of this year, down from $158.2 billion in the same period last year. more info
Rumi Morales, director of investments at Digital Currency Group, a major US crypto investor, said the data demonstrated growing confidence in the crypto and blockchain sectors.
“Previously, working in space seemed impossible, as if it were all a pipe dream. Those were the days.”
Wave Financial CEO David Siemer believes that last year’s sky-high crypto company valuations are beginning to correct.
“Things are only getting worse a few months into the current cycle.” Prior to this cycle’s agony, those seeking funding had to wait about a year and a half.”
The overall value of the crypto market has fallen by two-thirds to $1 trillion as a result of this year’s double whammy of macroeconomic headwinds and project failures, with bitcoin falling by approximately 65 percent from its November high of $69,000.
Companies such as Coinbase Global (COIN.O) and NFT platform OpenSea have laid off hundreds of employees as prices have fallen.
Despite the fact that some venture capitalists are ignoring the doom, with many deploying large war chests, their faith in the technology underlying cryptocurrency remains strong.
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