Venture capitalists still associate Bitcoin and the cryptocurrency industry with the 2022 crash. Although the majority of short-term investors have forgotten the past, the figures reveal that capitalists are still hesitant.
Although Bitcoin and altcoin prices have recovered this year, investments in crypto startups have continued to decline for five quarters, Reuters reports.
Investments by venture capitalists in the crypto sector were recorded around 2.3 billion dollars 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 experienced in 2022 were behind the decline in investments. Many crypto companies and FTX went bankrupt last year, which negatively affected the industry. Following these developments, increasing regulatory pressure, especially in the USA, causes large capital owners to hesitate.
Experts have found that venture capitalists are now paying more attention to companies that provide crypto infrastructure or develop blockchain technology rather than altcoin projects. Capital owners want to make more risk-free and reliable choices when investing.
PitchBook expects VC investments to rise again towards the end of the second half of the year.
