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The Big Decline in Crypto Financing

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Cryptocurrency industry raised more than $21 billion last year, almost $16 billion less in 2021.

Cryptocurrency services received 42.5% less money in 2022 compared to what they received in 2021. However, last year’s capital is significantly higher than the figures for 2018, 2019 and 2020.

Investment In 2022

The crypto winter that hit the digital infrastructure industry in 2022 caused a decrease in market share, a loss of investor interest, and halted the expansion plans of some companies. According to a study by CoinGecko, these companies raised $ 21.26 billion last year, and almost half of it was saved in the first quarter of the year, when the sector was more favorable.

Several mid-year cryptocurrency project meltdowns, such as the Terra crash and the bankruptcies of Three Arrows Capital (3AC) and Celsius Network, affected investor sentiment and the capital raised in the third quarter. is only $3.61 billion. The FTX crash in November also worked, as funders in the last three months of 2022 reached less than $3 billion.

By comparison, the cryptocurrency industry has a revenue of more than $37 billion in 2021. The bull market at the time and the fact that many digital assets, including bitcoin, are showing unprecedented prices seem to have fueled record investments.

Despite the reduction in 2022, last year was more successful than 2018 ($16.22 billion), 2019 ($4.48) and 2020 ($4.40 billion).

Coingecko explains the possible reasons for this:

“The relatively good financial performance in 2022 shows the growth of the cryptocurrency industry over the past five years, supporting other projects to protect financial support and growing interest from institutional investors.”

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Some of The Top Fundraisers Last Year

Andreessen Horowitz, also known as a16z, acquired one of the largest cryptocurrency investments in 2022, raising $4.5 billion in May. The company has pledged to allocate capital among blockchain and cryptocurrency startups and to invest in digital assets among larger wild markets. Katie Haun – the former head of a16z – raised $ 1.5 billion in March, saying that the money will support cryptocurrency projects in the Web3 organization.

The Luna Foundation (LFG) has raised $1 billion to build a bitcoin-based UST repository. Despite the huge revenue, the algorithmic stablecoin project ended in May and fell to almost zero.

Other significant investments include Fireblock’s $550 million investment, Immutable’s $500 million investment in development funding, and ConsenSys’ $450 million investment. Amber Group – a cryptocurrency platform supported by the investment company of Singapore Temasek – also made its name on the list at the end of 2022, raising $ 300 million.

The company, which was badly damaged by the FTX crash, promised to distribute the capital to the customers exposed to the exchange.

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