Crypto VC Funding Falls to 2-Year Low
Venture capitalist investment into crypto firms decreased in the first quarter of 2023. Galaxy research shows it is hitting two years near the ground with only 2.4 billion invested across 439 deals. So, the report stated that Crypto VC Funding Falls to 2-Year Low, but US firms remain popular.
US-Based Firms Lead Despite Uncertainty
This figure represents an 80% decline compared to last year, when VC investment peaked at almost 13 billion in Q1 2022. Despite the current uncertainty in the US regarding crypto, it still ranks first for the number of firms raising capital. US-based companies are securing 42.8% of the VC funding flowing into crypto in Q1 2023.
VC Deal Activity Increase
Although capital investment has decreased, the report revealed that the number of deals made has increased by almost 20%. Furthermore, the apparent correlation between cryptocurrency prices and capital invested could see VC activity. His activity rebound in the second quarter of 2023 following substantial price gains late in the first quarter.
However, the report also noted that the data on venture deals is often reported later. It means that the $2.4 billion figure quoted may be revised in the future.
France Emerges as a Strong Contender
Various statistics and anecdotal evidence suggest that crypto firms are leaving the US for better conditions. Not only crypto firms but also regulatory clarity and more favorable tax policies. However, Galaxy’s report found that France emerged as the biggest winner because capital investments for France-based crypto firms surged to 19.4% in the latest quarter from less than 5% in the third quarter of 2022.
It also included that jurisdiction of investments since Q3 2022, the US share of crypto VC investment has only decreased by 2.8% points since then.
Conclusion
The Galaxy Research report reveals that Crypto VC funding falls to a 2-year low, but US firms remain popular. It is hitting a two-year low in Q1 2023, despite the number of deals made increasing. However, it also notes that the recent price gains in the crypto market could lead to a rebound in VC activity in the coming quarter.
Despite the regulatory turbulence surrounding crypto in the US. The US-based companies remain the most favored for raising capital, with France emerging as a strong contender in the latest quarter.