According to Research by Alex Thorn, Overall, 2022 was a successful year for the crypto venture capital (VC) industry, but investment and allocation interest dwindled as the year progressed. Despite this, there was still a significant amount of investment, but the current economic, monetary, and cryptoasset environment suggests that 2023 may be a challenging year for all involved. Tightening financial conditions often lead to declining valuations and stricter demands from investors, creating a more difficult fundraising environment for entrepreneurs. In order to succeed in 2023, startups will need to focus on their fundamentals, control operational expenses, and drive revenue.

Web3 related startups, including non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), the metaverse, and blockchain-related gaming, dominated the deal count in Q4 2022, comprising over 30% of deals. It remains to be seen if this trend will continue into 2023.

The United States remains the dominant player in the crypto startup ecosystem. Given the ongoing importance of the US in these markets and its leading position, it is crucial for US policymakers to clarify and codify rules and regulations for the emerging space. Other jurisdictions have already taken steps in this direction.

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