Venture Capitalists Shrink Investments in Crypto Projects

Venture capital investments in the cryptocurrency sector in August 2022 have decreased by over 30% compared to July. Web3 projects are the most credible to investors. 

Venture Capitalists Shrink Investments in Crypto Projects

According to Cointelegraph Research analysts, venture capital investment in crypto projects fell to a 12-month low in August 2022. This is the fourth consecutive month of investment decline in the sector. 

In August, $1.36 billion in venture capital was raised, compared to $1.98 billion in July. Therefore, the decline in funding for cryptocurrency projects in the early stages exceeded 31%. Venture capitalists’ “average check” also decreased by 10%. The 101 deals closed in August had an average of $14.3 million. 

In August, 43% of all funds were raised by startups in Web3 spheres, and another 42% were shared by representatives of the NFT segment and infrastructure projects. DeFi and CeFi companies accounted for 11% and 4%, respectively. 

It’s noteworthy that the venture capital company CoinFund initiated the creation of a new fund with $300 million in capital to support Web3 projects in their early stages. The fund’s representatives expressed confidence that this sector “will continue to progress through all market cycles.” 

Note that Cointelegraph Research’s quantitative data on venture capital investment volume differs from other analytics companies, though the general dynamics are similar across the board. For example, analysts at The Block Research found a 22% decrease in venture capital funding for blockchain projects in Q2 2022. KPMG experts also predicted a slowdown in investment activity in the second half of this year. 

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