The first quarter of 2023 saw a further decline in venture capital (VC) investment, with just $2.4 billion going to cryptocurrency startups. This amount is at its lowest level since the 4th quarter of 2020, according to an analysis from Galaxy Research.
In 2022, despite controversies that rocked the cryptocurrency industry, venture capitalists continued a trend that had just begun. Venture investors are fleeing the industry in droves as a result of reports of regulatory uncertainty, a market slowdown, and record collapses.
Private financing for cryptocurrency businesses fell to its lowest level since 2020 in the first quarter of this year, according to research company PitchBook. Investments in cryptocurrency businesses received a record-breaking $13 billion in venture capital financing in the first quarter of 2022. Yet the number has subsequently steadily decreased, which is unsurprising for obvious reasons.
According to recent research, the United States leads the world in terms of the number of businesses raising capital despite the country’s current regulatory challenges. With 42.8% of the investment coming from US companies, this was a sizable portion. France comes next, at 19.4%, closely followed by the United States.
France appears to be the largest winner, as capital investments for French crypto enterprises increased to 19.4% in the most recent quarter from less than 5% in the third quarter of 2022, suggesting that France is the country that will benefit the most. On the other hand, businesses engaged in trading, exchange, investment, and lending raised more money, amounting to $538 million, than those in the Web3, NFTs, DAOs, Metaverse, and gaming sectors, which saw the most deals, with 116.
The $2.4 billion amount may be altered in the future because comprehensive data on venture agreements are typically published later, according to the study. The study emphasized that, despite the decline in capital investments, the number of completed acquisitions had increased by over 20%.
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