After the historic 2021, fiscal 2022 has been the most successful year for the cryptocurrency ecosystem. But a cascade of scandals, a cryptocurrency crash, and a sustained bear market rocked the sector, causing investors to turn their backs as quarters passed. Ultimately, while startups in the sector have raised more than $30 billion in VC funding in 2022, on par with 2021 levels of $31 billion, the coming year has been characterized by a post-Q1 hellhole for the rest of the year. was finished.
In the first three months of the year, while the green lights were still on, money was flowing, as evidenced by approximately $13 billion in approximately 1,100 transactions. One of the most significant credits was Yuga Labs for creating the NFT Bored Ape Yacht Club collection (10,000 unique drawings of human signs) with a fundraising of $450 million. But after such a promising start, the climate quickly deteriorated.
Investments in crypto startups in 2022 exceeded $30 billion.
The year ended with the weakest quarter in two years
Thus, the second quarter was marked in May by the collapse of the Terra stablecoin, which led to the bankruptcy of the Three Arrow Capital fund and platforms such as Celsius Network and BlockFi. This earthquake caused investors to lose $40 billion, and in just one week, more than $500 billion evaporated from the cryptocurrency market.
In the turmoil, startups in the ecosystem raised less than $10 billion between April and June. This collapse worsened in the second half of the year, with investments reaching $2.7 billion in the fourth quarter, with only 366 transactions recorded; this is more than 50% less than in the third quarter, when $6 billion was raised through 676 deals.
After a record first quarter of almost $13 billion raised, only $2.7 billion was invested in crypto startups in the fourth quarter of 2022.
The last quarter of 2022 recorded even the lowest number of transactions and invested capital in the last two years. In this context, 2023 promises to be a particularly difficult year for crypto startups that are desperately looking for funding to grow.