In the third quarter of 2022, investments in cryptocurrencies amounted to $879 million, which is an all-time low since the second quarter of 2021. However, this is still more than investing in other fintech, financial analysts state.
Decentralized finance (DeFi) and Web3 still lead the way in venture capital portfolios, according to the latest report from Pitchbook. Although the number of transactions is declining.
Experts state that investments in new digital technologies have been declining for the third quarter in a row, while the total amount of transactions reached $4.7 billion, which is 32% less than in the spring – $6.9 billion. Despite this, as well as the protracted decline in the cryptocurrency market, projects DeFi and Web3 are still the biggest areas to invest — they have outpaced fintech and biotech. Over the past 12 months, a total of $6.5 billion has been invested in the cryptocurrency industry.
Pitchbook said that the collapse of the FTX cryptocurrency exchange will lead to a reduction in investment in crypto startups for the next few months. At the same time, investor interest in startups has not faded, but now the selection will be more stringent. Experts believe that the downturn in the market will have little effect on companies that work on the blockchain.
“The fall of FTX will have a cascading effect and reverberate throughout the industry. Cryptocurrency startups will especially feel this,” Pitchbook experts say.
Earlier, analysts at Glassnode reported that investors with balances of less than 1 bitcoin added 96,200 BTC to their total holdings after the FTX crash.
Source: Bits
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