According to a report by RootData venture capital investments in the crypto industry have dropped more than 70% in the past year . The month of June 2023 witnessed the lowest amount of funds going to digital assets with only $520 million invested in 83 projects when compared to $1.81 billion in 149 rounds in June 2022.
Downward Trend Despite Intervening Gains
RootData’s data shows that venture capital interest in the digital asset area seems to be declining even with occasional increases in financing. With $1.85 billion invested in 138 rounds September 2022 had the biggest funding month while June of the previous year had the highest number of buyers with 149 rounds. With $213 million given to 26 projects in the infrastructure category in June 2023 a 50% drop from the month before, the category received the highest amount of cash .
Funding Breakdown by Categories and Projects
Gensyn AI secured $ 43 million in a Series A round led by a16z crypto and won the infrastructure category. CeFi received $101 million in funding while games attracted $62 million with a significant portion going to Mythical Games . DeFi and NFTs were also among the funded categories.
Factors Impacting VC Interest in Crypto
The decline in venture capital interest in the crypto-asset space can be attributed to various factors. Actions by companies like FTX and Terra as well as the banking turbulence affecting crypto-friendly banks have contributed to the waning interest . Recent regulatory developments in the United States which is a leading hub for crypto investments have also had an impact.
Final Thoughts
The RootData report highlights a significant drop in venture capital investments in the crypto industry over the past year with June 2023 marking the lowest funded month . Despite intermittent gains the overall trend indicates a decrease in VC interest. Various factors like specific company actions, banking issues and regulatory developments have influenced this decline . It remains to be seen how venture capital funding in the crypto space will evolve in the coming months.
