In recent months, the trend of venture capital (VC) investment in the crypto space has seen a downturn, with a significant decline of 29.73% observed in June. This decline amounted to a total VC funding of only $779.32 million across 62 independent deals. While the global economic climate remains uncertain, due to geopolitical uncertainties and ongoing inflation control efforts worldwide, it is important to note that this decline does not necessarily indicate a bearish trend.
Despite the temporary setback, the overall forecast for 2023 remains promisingly bullish. This optimism is supported by recent developments such as the Bitcoin exchange-traded fund (ETF) applications from industry giants like BlackRock, VanEck, WisdomTree, and Fidelity. Additionally, Ripple’s legal victory against the Securities and Exchange Commission has also had a positive impact on the cryptocurrency market.
However, it is worth mentioning that VC investments often reflect these market trends with a certain lag, as institutional investors tend to be more conservative and slow to adapt. Furthermore, the ongoing global economic uncertainties may contribute to a temporary restraint in VC activities.
Breaking down the VC deals in June, blockchain infrastructure secured the most funding, with 20 individual deals exceeding $493 million. Decentralized Finance (DeFi) also showed signs of regaining ground, attracting 20 deals with investments surpassing $144 million. Surprisingly, Web3 experienced a dip in popularity among VCs in June, with around $107 million invested across 18 deals. Centralized Finance (CeFi) and non-fungible tokens (NFTs) rounded out the list, securing investments of approximately $32 million and $2 million, respectively.
The largest deal in June was a $200 million investment secured by Islamic Coin (ISLM) from Alpha Blue Ocean’s ABO Digital. Islamic Coin aims to establish a digital financial instrument for the global Muslim community and has now crossed the $400 million mark in total funding. Following closely behind is the $43 million Gensyn deal, led by a16z Crypto with contributions from CoinFund and Canonical Crypto. Gensyn is a blockchain-based AI initiative that bridges the gap between computing power buyers and sellers.
Another notable VC investment in June was made in Mythical Games, which raised $37 million in a Series C round led by Scytale Digital and supported by ARK Invest and Animoca Brands. These funds will be used to launch a new marketplace and explore other revenue-generation opportunities.
Bitpanda Pro also closed a Series A round for $33 million, led by Peter Thiel’s Valar Ventures. The funding will help the company extend its reach to professional traders and institutions across Europe.
While June experienced a decline in VC funding compared to the previous months, these fluctuations should be seen within the context of the overall upward trajectory of the crypto market. The coming months of July and August are expected to provide further insights into the influential factors at play – whether it be general macroeconomic conditions or specific events within the crypto market. Time will tell which factors will ultimately shape the future of VC investment trends in the crypto space.
