After a set of 353 funding rounds, it fetched $2.6 billion (nearly Rs. 21,390 crore) towards start-ups working in the crypto sector in the first quarter of 2023 which is amidst January and March. If we look closely at both the figures, the investment rounds and the capital raised, have shown a decline of 78 percent and 64.4 percent, respectively, from last year’s first quarter. This shows that the crypto sector still remains appealing enough for venture capitals to pour hefty finances in related companies, but the slow paced second half of 2022 has affected the incoming funding into this particular sector.
The finance centred firm, Pitchbook, in its recent report claimed that the first quarter of 2023 became the fourth consecutive quarter of declining investment activity. This essentially means that between April 2022 and March 2023, fundings directed towards crypto concerned projects have remained comparatively low than the previous years.
“After the collapse of FTX and a wobbly few months of fluctuating valuations, crypto has stabilised. But Q1 2023 also marked the lowest amount of capital invested in the vertical since Q4 2020,” was said in the Pitchbook report. In the second half of 2022, over $200 billion (roughly Rs. 16,33,290 crore) was cleared off the global crypto market after promising projects like Terra and FTX crumbled due to the sheer lack of liquidity. Ever since 2021, the valuation of the crypto sector has also fallen from its highest point of $3 trillion (roughly Rs. 2,46,86,250 crore) to its current capitalisation of $1.14 trillion (roughly Rs. 93,54,177 crore), as per the reports of CoinMarketCap.The 2023 Q1 investments have raised by, around 33 percent in crypto startups as compared to the same month frame last year.PitchBook’s report had also mentioned that late rounds of investments grew by a higher margin of 209 percent between January and March this year, as compared to the same time last year.
The chances of securing an investment is still huge for crypto firms, especially those targeting privacy, data management, and security for Web3 protocols. Bitget, a Seychelles-based crypto exchange, as part of the investment pool has decided to invest $100 million (roughly Rs. 819 crore) in promising Web3 initiatives emerging from Asian nations. Companies like Solana, Binance, and Animoca also followed it’s part, resulting in heavy funding in the sector.