Crypto VC funding drops due to economic uncertainty scaring investors away.

Crypto VC funding drops due to economic uncertainty scaring investors away.

The Blockchain Industry: A Comprehensive Overview

The month of June witnessed a significant decrease in venture capital investments, with just $779.32 million raised in 62 individual deals, according to data from the Cointelegraph Research Venture Capital Database. This decline can be attributed to ongoing geopolitical uncertainties and efforts to control inflation globally. However, this should not be seen as a bearish signal, as the overall trend for 2023 remains upward.

One factor that has helped improve market sentiment is the recent surge in Bitcoin exchange-traded fund (ETF) applications from major players such as BlackRock, VanEck, WisdomTree, and Fidelity. Additionally, Ripple’s legal victory over the Securities and Exchange Commission has contributed to a positive outlook. While the crypto market responded promptly to these developments, venture capital investments tend to be more inert and cautious, resulting in a lag. Moreover, the uncertainty in global economic conditions may also impact VC activity.

Blockchain Infrastructure Still Dominant

A closer look at the Cointelegraph Research Venture Capital Database reveals that the breakdown of deals in June did not experience significant changes, and the investment focus of venture capitalists remained relatively stable. Blockchain infrastructure continued to lead the market, accounting for 20 individual deals and over $493 million in funding.

Decentralized finance (DeFi) regained some ground in June, with 20 deals and over $144 million invested. Surprisingly, Web3 was less popular among venture capitalists during this period, receiving approximately $107 million across 18 deals. Centralized finance (CeFi) and nonfungible tokens (NFTs) secured the remaining spots on the list, with approximately $32 million and $2 million of investment, respectively.

In terms of specific deals, the largest one in June was Islamic Coin’s (ISLM) $200 million raise from Alpha Blue Ocean’s ABO Digital. The project aims to create a digital financial instrument for Muslims worldwide and has already received total funding exceeding $400 million. Another notable deal was Gensyn’s $43 million funding round, led by a16z Crypto with participation from CoinFund, Canonical Crypto, and others. Gensyn focuses on blockchain-based artificial intelligence, connecting buyers and sellers of compute power.

Mythical Games also secured a significant investment, raising $37 million in a Series C deal led by Scytale Digital, with participation from ARK Invest and Animoca Brands, among others. These funds will be utilized to launch a new marketplace and pursue other revenue-generating initiatives. Bitpanda Pro closed a Series A round, raising $33 million led by Peter Thiel’s Valar Ventures and rebranded as One Trading. This funding will help the company expand its reach to professional traders and institutions across Europe.

The Overall Trend and Future Outlook

While venture capitalists increased their capital inflows into the blockchain space during March, April, and May, June witnessed a deviation from this trend. However, it is important to note that slight month-to-month fluctuations are less significant than the overall upward trajectory. The impact of spot ETF filings and the Ripple-SEC lawsuit on the crypto venture capital market is yet to be seen. Therefore, July and August will likely provide better indications of whether general macroeconomic conditions or crypto market hype events will hold more weight.

To stay updated on venture capital activity, it is recommended to follow the Cointelegraph Research VC Database, which is regularly updated and tracks over 6,000 deals from 2012 to the present day.


*Note: The article has been written based on the content provided and may not reflect real-time data or events.