• Alex Thorn, head of research at crypto investment firm Galaxy Digital, reported that venture capital firms invested over $30 billion in blockchain and cryptocurrency firms in 2022.
• 31% of these deals were in the web 3 sector, while 13% of deals were on trading platforms.
• Fred Wilson, tech investor and co-founder of Union Square Ventures, discussed the potential macroeconomic picture for 2023 and the need for prospective web3 investors to exercise some restraint.
Galaxy Digital recently reported that venture capital firms invested over $30 billion in investments in blockchain and cryptocurrency firms in 2022. The data was reported by Alex Thorn, head of research at the crypto investment firm, who revealed that 31% of the deals were in the web 3 sector, which includes non-fungible tokens (NFTs), decentralized autonomous organizations, the metaverse, and online gaming. This is compared to the 13% of deals which were on trading platforms.
The research firm also noted that macroeconomic issues and the collapse of essential crypto enterprises may have contributed to the downturn, and that later-stage businesses are receiving more funding, particularly those that offer trading and exchange services. It also revealed that when it comes to crypto VC deals, the U.S. remains in the leading position, but that politicians need to create policies that won’t discourage innovation.
Fred Wilson, a tech investor and co-founder of Union Square Ventures, also discussed the potential macroeconomic picture for 2023 and the need for prospective web3 investors to exercise some restraint. In a blog post from Jan.1, Wilson highlighted the importance of investors taking a long-term view and considering a variety of factors when investing in web3 companies. He also mentioned that there would be a surplus of start-up companies seeking a place in the market in 2023, meaning investors need to be mindful of the risks they are taking.
Overall, the data provided by Galaxy Digital suggests that web3 blockchain firms and trading-based services are dominating venture-capital transactions and funding in 2022, and that this trend may continue in 2023. It is likely that the U.S. will remain in the leading position for crypto VC deals, but that politicians need to create policies that won’t discourage innovation. Investors should also exercise some restraint when considering investments in web3 companies, and take a long-term view when assessing the potential of businesses in the space.