2022 was the year that the entire crypto market completely collapsed. The rates of most cryptocurrencies are in the red with more than 75% and an optimistic sentiment is very hard to find. Nevertheless, there are also positive signs to note. It now appears that the amount of venture capital, ie venture capitalwhich was invested in crypto startups this year, is on track to break the 2021 total.
Venture capitalists are not afraid of crypto winter
The difficult macroeconomic conditions and the collapse of large crypto companies such as ftx and Terra don’t seem to have deterred venture capitalists. According to pitch book data shows that at least $20 billion has been invested in at least 616 crypto startups during the first three quarters of 2022.
“The long and short term is that crypto is far from done,”
That is no less than 41% more than during the same period a year earlier. One possible explanation is the fact that the value of virtually everything related to crypto has plummeted. Not only the cryptocurrencies, but also the companies behind them. This makes it very attractive for venture capitalists to invest, especially since the crypto market is still so young.
New record in 2022
The data from Pitchbook does show that the total venture capital flowing into the crypto industry in the last quarter of this year will most likely be lower than in Q3. That is a negative signal, because in previous years the amount always continued to grow each successive quarter.
Average funding for seed and early-stage crypto startups this year jumped to $5 million to $20 million from $3 million to $11.7 million in 2021. Venture capital for an average late-stage startup remained virtually flat at around $30 million .
The figures clearly show that venture capitalists, as the name suggests, do not just lose their appetite for investment. Many of them probably see enormous opportunities at the moment, which has led to more investment in new crypto companies in 2022 than the year before.