Report on investment capital in Blockchain and Cryptocurrencies of VC Q4 2022

2022 sees an overall decline in Blockchain and Cryptocurrency venture capital. 2022 is a difficult year for the Cryptocurrencies market, one the proofs of this is the decline in venture capital (VC) flows into the field: Blockchain & Crypto Currencies

A report from Blockdata highlights consecutive quarterly funding reductions through the end of 2022, after massive investments in Web 3 in 2021

Analyzing data from CB Insights, Blockdata rounded up the value of venture capital in the last quarter of 2022, recording a 34% decrease compared to the third quarter of 2022. The last quarter of the year fell sharply compared to the third quarter of 2022. Q1 and Q2 were down 67% and 53% respectively.

The subsequent drop in VC investment hit an all-time low of $11 billion and 692 deals in the first four months of 2022.

Analyzing data from CB Insights, Blockdata rounded up the value of venture capital in the last quarter of 2022 | Image Source: Internet

Besides, block data points to several factors that led to the drop in crypto and blockchain-related VC funding last year. Take for example the $60 billion collapse of the Terra ecosystem in May 2022 and the subsequent bankruptcy of crypto lenders Three Arrows Capital and Celsius.

Changes in macro factors in the market such as rising interest rates and inflation also contribute to a decrease in investment from venture capitalists.

As a result, Q4 2022 only had $3.7 billion in funding from VCs — down 61% from $9.6 billion in Q4 2021. Total funding from startups on blockchain and cryptocurrency fell 11% year-on-year, from $32 billion to $29 billion.

Block data highlights a 35% increase in transaction volume in 2022 compared to 2021 as a positive result. The company suggests that despite a drop in venture capital spending, investors are still looking for ways to fund blockchain-based technologies, applications, and startups.

Q4 still makes some big venture capital investments. Amber Corporation has secured the highest level of funding, raising $300 million in a Series C round in December 2022 to address the drop in specific products affected by the FTX crash.

Nine “blockchain super rounds” took place in Q4, where companies raised over $100 million in funding. Uniswap and Celestia were the only companies to achieve unicorn status in Q4 last year, valued at $1.7 billion and $1 billion, respectively.

Coinbase Ventures has been identified as one of the most active venture capitalists through 2022, participating in 13 different funding rounds for blockchain and crypto startups.