Despite the bear market in the cryptocurrency space, venture capital (VC) firms are still making deals in 2023, showing that despite the "crypto winter," the space is still alive and well.
According to PitchBook's Q1 2023 Crypto Report, crypto companies raised $2.6 billion across 353 investment rounds. While it shows that the space is still active, it's clear that it's not as strong as it once was.
The report showed that the value of transactions fell 11% month-on-month, and the total value of transactions fell 12.2%. Additionally, the quarter saw the lowest amount of investment in the sector since 2020. The report also noted mixed valuation trends . Compared to all of 2022, this quarter saw a 33.3% increase in seed funding and a 209.2% increase in late-stage funding. However, early-stage funding rounds fell by 16.7%. While the report acknowledges that the decline is likely to continue, it also identifies some positive prospects for the sector. The data shows that Layer 2 scaling solutions can continue to gain momentum starting in 2022. Report Cites Blockstream Raising $125 Million To Fund Bitcoin.Mining infrastructure and Scroll a company building a zero-knowledge Ethereum virtual machine scaling solution has raised $50 million in a late-stage venture capital round.
In addition to scaling solutions, custodial solutions providers Ledger and Taurus have seen significant investments in 2023. Ledger raised $109 million on March 30 as demand for self-custody soared. Meanwhile, Taurus raised $65 million in a Series B round on Feb. 14.
