"2022 Review: Crypto VC Investment Declines Despite Strong Web3 Startups"
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.
more than $30bn was invested in crypto startups by venture investors in 2022 across 2900 deals, an absolutely monster year that was only beaten by 2021. but that isn't remotely the whole story... pic.twitter.com/khduDKDZhd
— Alex Thorn (@intangiblecoins) January 5, 2023
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.
web3 related startups, a bucket in which i put NFTs, DAOs, metaverse, and blockchain-related gaming, still dominated the deal count. more than 30% of deals in Q4 2022 involved web3 companies. whether this narrative will persist in 2023 is an open question.
— Alex Thorn (@intangiblecoins) January 5, 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.