It was back in 2021 when the cryptocurrency and blockchain sector grew enormous in size. The adoption level for the crypto-blockchain sector was tremendous and the mainstream firms also realized the importance of investing in the technology.
This is the reason why the health of the cryptocurrency and blockchain sector was at its peak. Many venture capital funds for blockchain technology had risen tremendously in the year 2021.
The investment firms backed by many mainstream companies invested heavily in cryptocurrency and blockchain ventures. However, the health of the investments being poured into the venture capital firms for blockchain technology has been deteriorating.
Venture Funding is Cooling Off
The blockchain venture funds have been dropping since the begging of the first half of 2022.
The data shared by the research firms has revealed that in the month of July, the blockchain venture capital market recorded a tremendous decline.
Compared to July 2021, a 43% decline has been recorded in the blockchain venture capital market.
Top Ventures within the Crypto-Verse
Within the cryptocurrency universe, the major sectors with the highest venture capital generations include metaverse, GameFi, and Web3.
According to the research, these firms have proven to have the lion’s share as they have attracted the highest number of investors.
Although the particular sectors have been on top of the list, still, it does not mean they have recorded as strong capital as they did in 2021.
The capital inflows in these sectors in 2022 compared to the year 2021 have been very low. When the market was bullish, the investments in blockchain venture capital funds were very high.
Unfortunately, the situation has now changed and the investments from blockchain capital venture firms are extremely low.
July Capital Inflows have nosedived
Just like the rest of the investors, the Bitcoin maximalists have also started to lose their confidence. Even the Bitcoin maximalists appear to be negatively impacted by the overall downfall of Bitcoin.
They have also resorted to staying neutral and doing nothing until they see things become bullish again for Bitcoin.
Just like the rest of the segments impacted in the crypto-verse, the venture capital segment has experienced a huge upset. This has proven that venture capitalists are not immune to the cryptocurrency downfall being recorded in the industry.
This is a clear indication that the downtrend of the cryptocurrency industry has started to show signs in the private funding sector as well.
Statistics Recorded for Q2
The venture capital report for the second quarter of 2022 shows that compared to the year 2021, venture capital funds have declined by 16%. In the second quarter of 2022, the venture capital investments recorded were just $26.8 million.
It is an indication that the venture capital investments train has started to lose its team after moving strongly in the year 2021.
This means that the cryptocurrency and blockchain sector are losing their traction, meaning that the value of cryptocurrencies may not witness significant gains despite strong predictions.
