Venture capitalists still commemorate the Bitcoin and cryptocurrency industry with the 2022 crash. Although the vast majority of short-term investors forget the past, the figures reveal that investors are still shy.
Investments in crypto startups have continued to decline for the past five quarters, although Bitcoin and altcoin prices have recovered this year, Reuters reported.
Investments by venture capitalists in the crypto sector were recorded at around $2.3 billion in the April-July period. PitchBook stated that this figure is the lowest quarterly data in 3 years. Total investment in the first half of 2023 decreased by approximately 75% compared to 2022.
Why Are Investments Decreasing?
Cryptocurrency experts commented that the unpleasant events in 2022 were behind the decline in investments. Many crypto companies and FTX that went bankrupt in the past year have negatively affected the industry. After these developments, the increasing regulatory pressure, especially in the USA, causes large capital owners to hesitate.
Experts have found that venture capitalists are now more interested in companies that provide crypto infrastructure or develop blockchain technology than altcoin projects. Capital owners want to make more risk-free and reliable choices when investing.
PitchBook expects VC investments to pick up again towards the end of the second half of the year.
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