Venture capitalists are investing in blockchain and digital currency firms at a rate that is expected to surpass last year’s record, despite the fact that the crypto industry is shivering in the cold winter.
According to information from PitchBook, VCs invested $17.5 billion in these companies in the first half of the year. As a result, investment is on track to surpass the record $26.9 billion raised last year. Which will make things better and happier for bitcoin and the company.
The founder of Hong Kong investment firm Lemniscap.Who specializes in cryptocurrencies and blockchain, Roderik van der Graf, stated, “I don’t think investors are alarmed by the present market conditions.” The amount of capital accessible is vast.
VC funds provide finance to start-up businesses they consider to have promising development potential. Despite a trying six months for the sector. The data indicate a strong belief in the future of cryptocurrency and blockchain technology.
Bitcoin has fallen by around 65 percent from its record high of $69,000 set in November. As a result of macroeconomic headwinds and significant project failures this year. And the total market value of cryptocurrencies has fallen by almost two-thirds to $1 trillion.
As prices drop, businesses have trembled. Major U.S. exchange Coinbase Global and NFT platform OpenSea are just two of many that have had to lay off hundreds of employees.
Although many VCs have deployed sizable war chests because of their continued confidence in the core technology of cryptocurrencies. Some are choosing to ignore the doom.
However, not many investors are that optimistic in the face of cryptocurrency devastation.
The CEO of California-based crypto management company Wave Financial, David Siemer, claimed that there were indications of a correction from the exorbitant values of crypto enterprises in 2017.
“We are already a few months into this cycle, so things will only grow worse. For those searching for money in the last round, the suffering lasted almost a year.”
HOTSPOT FOR VC DEALS
With $11.4 billion in the six months leading up to June, compared to $15.6 billion for the entire year prior, North America. Which has long been the hotspot for VC deals, and was once again the center of attention.
The figures stand in contrast to overall venture capital activity in the US. Where deals decreased to $144.2 billion in the first half from $158.2 billion in the same period last year as market instability and macroeconomic factors restrain investment.
Rumi Morales, director of investments at the significant American venture capital firm Digital Currency Group. Claimed that the statistics showed growing confidence in the cryptocurrency and blockchain industries.
“Being in the space used to pose an existential threat. Because of the possibility that the entire sector may vanish and turn out to be a dream. That is no longer the case.”
Even the revolutionary changes that the technology was about to bring about in sectors like finance and commodities have yet to materialize. The usage of cryptocurrency as an investment tool mushroomed last year, and blockchain technology has also gained popularity.
The $400 million was raised by the American division of cryptocurrency exchange FTX in January. The $450 million financing round by blockchain firm ConsenSys in March. And the $400 million raised by stablecoin issuer Circle a month later are just a few of the major U.S. crypto transactions in 2022.
With VC investments totaling $2.2 billion in the first half of the year, activity is also brisk throughout Europe.
Fedi, a Lisbon-based program that makes it easier to accept, store, and use bitcoin, said this month that it had secured $4.2 million in early funding.
One of its founders, Obi Nwosu, told Reuters that “within seven days we had all of the funding pledges. And in less than a month and a half, we had reached our initial fundraising goal”.