Saturday, May 17, 2025
  • Dashboard
  • Login
  • Registration
  • Contact us
quantann
No Result
View All Result
quantann
No Result
View All Result
quantann
No Result
View All Result

Web3 Fundraising Plunges By 82% In Q1 2023 – Here’s Why

April 30, 2023
in Cryptocurrency
Reading Time: 4 mins read
0
0
Home Cryptocurrency
Share on FacebookShare on Twitter

[ad_1]

The Web3 space has experienced a resurgence since the turn of the year, with several tokens recovering from the bearish winter in 2022. However, this has done little to spur interest from venture capitalists toward investing in the crypto industry. 

According to a report from Crunchbase, venture funding has plummeted from $9.1 billion in Q1 2022 to $1.7 billion in Q1 2023. This represents an 82% decline from year to year and shows investors are bearish toward investing in web3 projects. 

Related Reading: Solana Experiences 3% Rise In 24 Hours – Is A Bullish Trend Imminent?

In context, the $1.7 billion invested in the first quarter of 2023 is the lowest since the fourth quarter of 2020 ($1.1 billion) when Web3 was in its early stages. This decline is linked to developments in the second half of 2022. 

Fundraising Decline Linked To Terra Luna And FTX Collapse

To put this into context, the crypto market was experiencing a boom from VC-led funding, which peaked in the fourth quarter of 2021 and continued to the first quarter of 2022. During Q1 2022, VC-backed startups raised more than 20 rounds of more than $100 million. 

This included high-profile raises by ConsenSys, Polygon, and FTX, which raised over $400 million in VC funding. The second quarter of 2022 experienced a similar trend, with over $9 billion raised by crypto startups. However, the crash of Luna towards the end of Q2 2022 immediately impacted VC-led funding. 

Total fund raised from VCs per quarter: source @crunchbase
Total fund raised from VCs per quarter: source @crunchbase

From the chart above, the investments in Q3 dropped by more than 50% to $4 billion, indicating that the crash had led to second thoughts from investors. The subsequent crash of FTX in Q4 appeared to confirm VCs’ fears about investing in a volatile market.  This could be why the investment in Q1 hit a low of $1.7 billion. 

What This Means For The Future Of Web3

In its study report, Crunchbase notes a drop in the amount invested and a drop in the number of funding rounds. For context, the first quarter of 2022 recorded more than 500 funding rounds compared to 333 this year. In addition, the study reveals that only three financing rounds exceeded $100 million in the past quarter compared to 29 a year ago, a drop of nearly 90%. 

However, these events should not be viewed as overly negative. The development in the past year has shown some of the dangers within the crypto ecosystem. It has also helped expose some bad actors like Luna Foundation and FTX, which collapsed despite receiving VC funding. 

Related Reading: Trust Wallet Announces $170,000 Loss Due To Security Vulnerability

It is well established that difficult periods typically provide an ecosystem where projects must build solid use cases to survive until the bull market. Therefore it is expected that the Web3 industry will emerge stronger despite the current decline in funding. 

The crypto market responded positively in Q1, with the leading coin, Bitcoin, recovering and hitting $30,000 during this period. At the time of writing, Bitcoin is trading at around $27,590, down 9% in the past seven days. 

Bitcoin price has experienced correction and hovers around $27,000: source @tradingview
Bitcoin price has experienced correction and hovers around $27,000: source @tradingview

Featured Image from Pixabay, charts from Crunchbase and TradingView

[ad_2]

Source link

Tags: fundraisingheresplungesWeb3
Previous Post

How HBO and Netflix have evolved away from each other

Next Post

Alphabet, Amazon, Microsoft, Meta: It’s a Monster Week in Earnings

Related Posts

edit post
Amid Bitcoin ETF Race, BlackRock, Fidelity, Invesco Dot Their Bureaucratic I’s as Likely SEC Action Looms
Cryptocurrency

Amid Bitcoin ETF Race, BlackRock, Fidelity, Invesco Dot Their Bureaucratic I’s as Likely SEC Action Looms

by Quantann
December 30, 2023
edit post
Goldman Sachs Exec Predict Growth For Digital Assets In 2024
Cryptocurrency

Goldman Sachs Exec Predict Growth For Digital Assets In 2024

by Quantann
December 30, 2023
edit post
Analyst Warns Of Bitcoin Dip, BTC Price To Reach K?
Cryptocurrency

Analyst Warns Of Bitcoin Dip, BTC Price To Reach $40K?

by Quantann
December 29, 2023
edit post
Coinbase International sets perpetual futures leverage limit to 10x
Cryptocurrency

Coinbase International sets perpetual futures leverage limit to 10x

by Quantann
December 29, 2023
edit post
Rough Days Ahead For Bitcoin? 2 Experts Predict A Price Correction Before New ATH
Cryptocurrency

Rough Days Ahead For Bitcoin? 2 Experts Predict A Price Correction Before New ATH

by Quantann
December 29, 2023
Next Post
edit post
Alphabet, Amazon, Microsoft, Meta: It’s a Monster Week in Earnings

Alphabet, Amazon, Microsoft, Meta: It’s a Monster Week in Earnings

edit post
Bed Bath & Beyond files for bankruptcy after years-long decline

Bed Bath & Beyond files for bankruptcy after years-long decline

edit post
Wipro Share Buyback: Wipro to consider share buyback on April 27 along with Q4 results

Wipro Share Buyback: Wipro to consider share buyback on April 27 along with Q4 results

  • Trending
  • Comments
  • Latest
edit post
Investopedia Simulator

Investopedia Simulator

April 8, 2023
edit post
KT Corporation: A Bright Future Lies Ahead (NYSE:KT)

KT Corporation: A Bright Future Lies Ahead (NYSE:KT)

January 17, 2023
edit post
Alpha Spread Review – How Does This Platform Compare?

Alpha Spread Review – How Does This Platform Compare?

February 4, 2023
edit post
Evaluating Oil & Gas Stocks: A Comprehensive Guide for Energy Investors

Evaluating Oil & Gas Stocks: A Comprehensive Guide for Energy Investors

July 25, 2024
edit post
Understanding the Dynamics of Energy Commodities: A Comprehensive Analysis

Understanding the Dynamics of Energy Commodities: A Comprehensive Analysis

July 19, 2024
edit post
FDX Earnings: FedEx Corporation reports higher Q4 revenue and adj. profit

FDX Earnings: FedEx Corporation reports higher Q4 revenue and adj. profit

June 26, 2024
Facebook Twitter Instagram Youtube RSS
quantann

Get the latest news and follow the coverage of Financial News, Stocks, Analysis, Trading Updates and more from the top trusted sources.

No Result
View All Result

CATEGORIES

  • Blog
  • Business
  • Commodities
  • Cryptocurrency
  • Investing
  • Markets
  • Personal Finance
  • Trading

SITE MAP

  • About Me
  • Contact us
  • Disclaimer
  • Privacy Policy
  • DMCA
  • Terms and Conditions
  • Cookie Privacy Policy

Copyright © 2022 Quantann.
Quantann s not responsible for the content of external sites.

No Result
View All Result
  • Home
  • Business
  • Markets
  • Commodities
  • Cryptocurrency
  • Personal Finance
  • Trading
  • Blog
  • About Me
  • Analytics Dashboard
  • Login

Copyright © 2022 Quantann.
Quantann s not responsible for the content of external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In