Data Shows a Slowdown in Funding for Crypto Companies

According to Crunchbase, investments in crypto companies have slowed this year, from $12.5 Billion in 2021 to $9.3 billion for H1 2022. However, the deal flow (the rate at which investors and venture capitalists receive business proposals) has surprisingly increased compared to last year, from 456 deals to 534 in 2022.

This is no surprise, given the negative press surrounding crypto events in H1 this year. However, the outlook is not entirely negative, as the second quarter (Q2) numbers held strong and steady. Numbers showed that more than $4.2 billion was invested in crypto startups in Q2, $1 billion less than the previous quarter. 

The second quarter saw some notable rounds announced, among which Germany-based "Trade Republic," Binance US $200M seed round from April, and Liechtenstein-based crypto exchange Unizen with $200M raised in June. Circle Internet Financial also closed a $400M round from BlackRock, Fin Capital, Fidelity Management and Research, and Marshall Wace. This comes after Circle announced six other $400M rounds in the first quarter.

The ongoing crypto winter also brought a few notable bad news. BTC and ETH lost 50% of their market value compared to November highs, while crypto platforms such as Celsius Network and Three Arrows Capital filed for bankruptcy, leaving users unable to withdraw their digital assets. The crypto industry also saw a stablecoin called UST collapsing. Although it is scary that a stablecoin can collapse, it is worth mentioning that UST was closely related to Terra Luna's collapse.

Given the massive colapse in the crypto market, it is suprising to see investment volume not grind to a hault. It is good for the market to see these large instiutional players not scared off by volitality and downturns, and ready to play the long game.

Author: Garrett Meifert

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