Crypto VC Investment Plummets 68% to $10.7 Billion in 2023

• 2022 was the biggest year for crypto VC financing to date.
• With 1,819 transactions, the year was 32% lower than 2022’s 2,671 in terms of VC deals.

From $33.3 billion last year to $10.7 billion in 2023, venture capitalists (VC) put 68% less money into blockchain and cryptocurrency firms.

With a decrease in the second half and an increase in November, the majority of these investments occurred in the first half of the year. One interesting trend seen in 2023 was a decrease in the number of transactions awarded to mid- and later-stage firms, while the proportion allocated to pre-seed, seed, and Series A businesses climbed.

Data, trading, and enterprise saw a decline in transaction activity, but web3, infrastructure, and NFT/gaming remained the most active sectors.

All Eyes on 2024

While 2022 was the biggest year for crypto VC financing to date, 2023 was the third-highest year in terms of overall investment, albeit it was still much lower than the extraordinary levels attained previous year.

Total investment in 2023 still exceeds that of previous bearish markets, even if the year saw a slump. This year’s financing was much more than the $6.4 billion allocated in 2019-2020.

Additionally, the volume of crypto VC deals decreased in 2023. With 1,819 transactions, the year was 32% lower than 2022’s 2,671. In 2023, the total number of deals was almost identical to that of 2021 and was constantly more than the monthly totals for 2020 and 2021.

Bitcoin has bounced back from losses in 2022 to establish a new annual high and show indications of a solid year-end. Based on historical trends, it seems that there may be more expansion down the road. All eyes are now on the upcoming year as investors and traders are excited over the anticipated approval of spot Bitcoin ETF by the U.S SEC.

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