Crypto Ventures Gain Momentum with a 2.5% Rise in Investment in Q4 2023
Summary:
Venture funding for crypto-based companies rose by 2.5% to $1.9 billion in Q4 of 2023, according to a PitchBook report. This marks the first increase since Q1 of 2022, with significant deals including substantial funding for Swan Bitcoin, Blockchain.com, and Wormhole. Despite challenges in 2022, reflected by a decrease in venture capital investment, the crypto industry witnessed significant events in 2023, such as the entry of BlackRock and EDX markets into the crypto space.
The last quarter of the year 2023 observed a slight rise of 2.5% in venture capital for businesses rooted in cryptocurrency, amounting to a total of $1.9 billion, as stated in PitchBook's report. This increment in venture capital investments in crypto-based startups is the first since the initial quarter of 2022.PitchBook's research emphasized heavy-funded crypto projects mainly focused on financial and technological solutions, such as blockchain-based tokenization of actual assets like stocks and real estate, and establishment of decentralized computing systems.Highlighted funding rounds of the quarter include cryptocurrency exchanges Swan Bitcoin and Blockchain.com, raising $165 million and $100 million respectively. The most sizable deal of the quarter allocating $225 million to Wormbook, an open-source platform for blockchain development. With backing from Coinbase Ventures, Jump Trading, and ParaFi Capital, the company now boasts a worth of $2.5 billion.To ensure that investments in cryptocurrency remain on the rise, the launch of the inaugural spot Bitcoin exchange-traded funds (ETFs) in the U.S. late last year played a crucial role, as per PitchBook’s Q4 report. The first quarter of 2023 saw $2.6 billion secured by crypto organizations in 353 investment rounds, according to PitchBook’s Q1 Crypto Report. The report also unveiled an 11% decrease in deal value from the previous quarter and a 12.2% decay in total deals, marking the lowest investment since 2020 in this sector.The cryptocurrency industry underwent struggles in 2022, reflecting the downsized venture capital allotment for sectors dedicated to crypto and blockchain. Post peaking at $11 billion in assets and 692 deals in the early quarter of 2022, the subsequent quarters experienced a steady dip in VC investments.Several events such as the 2022 crash of Terra ecosystem and the consequent bankruptcy of Three Arrows Capital and Celsius, cryptocurrency lending businesses, led to this reduced funding in crypto and blockchain-related ventures. Other global economic elements like heightened inflation rates and interest rates, along with the FTX crash in November 2022, further roused market instability.Regardless, 2023 saw the crypto industry survive through significant events and heightened global adoption, pointing to its volatile nature. Remarkable advances like entry of BlackRock into the crypto space and startup EDX Markets joining the crypto exchange scene were some of the instances.
Published At
2/18/2024 3:49:13 PM
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