Crypto and blockchain startups experienced a dry quarter in the first period of 2023, as venture funding fell to its lowest level since late 2020. This drastic decrease in capital and the number of deals (136) raised several questions regarding the future growth of the sector. Further developments in the months to come will indicate whether or not the dearth in financing will become a more perennial issue.

The sharp decrease in investments can be attributed to a multitude of factors, such as regulatory restrictions, market indecisiveness, and the failure of some major companies like FTX and Celsius. Additionally, Bloomberg reported that venture capitalists are now placing greater emphasis on verifying the validity of projects before investing, in an effort to escape further disasters in the crypto industry.

It appears that experienced and well-trusted companies are still capable of securing venture funding. Ledger was successful in obtaining $108 million of capital in March, despite the general shortage of investments in the sector. This highlights the fact that a solid background and reliable reputation will still garner attention from potential backers.

All in all, the situation appears to be dire for the crypto industry, as venture funding dissipates during the start of this new year. Yet it is too soon to tell for certain if the financial drought for crypto and blockchain startups will continue in the coming months.



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