Investments by venture capitalists, also known as venture capitalists, in crypto companies are nowhere near as large as they were in the past Bull run. Still, we’re starting to see these venture capitalists return to the crypto sector, reports Binance Research, the research arm of the world’s largest crypto exchange.
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Venture capitalists are returning to cryptocurrency
Compared to the previous year, investments by venture capitalists in the crypto space increased by 44 percent. That’s great news, of course, but it doesn’t come close to matching the impressive activity of venture capitalists during the 2021 bull market.
From January 2021 to April 2022, venture capital investments even increased by 361.8 percent. However, in May 2022, the Terra (LUNA) ecosystem collapsed.
Although the third quarter saw a 44 percent year-on-year increase, the level and total value of investments were still significantly higher in the first quarter of this year. There were 272 deals in the first quarter and 169 in the third quarter.
There will be a downward trend in 2023, but the total will be significantly higher than the previous year. The data from the Binance Research study also only runs until September. As you know, we saw significant growth in the crypto sector in October. Therefore, there is a good chance that the current market will attract more venture capitalists again.
Venture capitalists are betting on crypto gaming
Over the past four quarters, venture capitalists have invested primarily in the crypto gaming sector.
“Venture capitalists’ continued investment in the gaming industry points to a strong growth forecast, accompanied by an increase in funding for AI and data in recent quarters. The third quarter of 2023 saw a shift to four key areas of focus, including decentralized exchanges (DEXs).”
This emerges from the study by Binance Research, which also takes a look at the parties that are currently taking the lead among venture capitalists. This mainly affects Pantera Capital, Dragonfly, a16z, Coinbase Ventures and Polychain Capital. Remarkably, the latter two made a joint investment 40 times.