Crypto VC Firms Made Deals Worth $2.6B in Q1 2023: Report

May 13, 2023

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As per the recent publications, PitchBook’s crypto reports for the opening quarter of 2023 shows that crypto businesses raised $2.6 billion in 353 funding rounds.

11% Drop in Quarterly Transaction Value

In addition, the study shows an 11% drop in quarterly transaction value and a 12.2% drop in overall agreements. Furthermore, the quarter saw the lowest amount of money spent in the market since 2020.

According to the research, value patterns have been uneven. When compared to the full year of 2022, initial rounds are up 33.3% while late-stage rounds are up 209.2% in the first quarter. Early-stage rounds, on the other hand, are down 16.7%.

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Crypto Trends Emerge Amid Bearish Conditions

Although the research acknowledges the possibility that the slump could keep going, it further identifies some encouraging trends in the space. According to the statistics, layer-2 scaling solutions that saw increased adoption in 2022 can maintain their momentum.

According to the article, Blockstream raised $125 million to construct a Bitcoin mining infrastructure and raised $50 million in a late-stage venture capital round.

VC Firms Unwavered by Crypto Winter

Despite the fact that the cryptocurrency market is in a downturn, venture capital (VC) companies continue to perform transactions in 2023, indicating that the field continues to be thriving and growing amid the “crypto winter.”

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Furthermore, a yearly evaluation providing a look at the cryptocurrency market from a business standpoint, Fidelity Investment’s “2022 Institutional Investor Digital Assets Study,” which was released last year, stated that the sector is in a strong position to endure possible economic challenges.

Difficult Year for Growing Startups

However, Galaxy Research forecasts a difficult year for crypto startup investments. Alex Thorn, Chief Research Officer at Galaxy Digital, suggested that if present trends continue, crypto and Web3 startups may struggle to acquire capital in 2023.

According to the cryptocurrency expert, it was a “monster year” that was only slightly topped by the $31 billion in VC investments in 2021.