VCs are still here despite winter. In the middle of the tumult of current events where the SEC, RippleCoinbase and Binance are vying for the spotlight. activity report confirms the trend observed in recent months, with a decline in investments in the cryptos. The researchers at Galaxy Research have compiled a set of data to provide us with a summary of the activity of the investment funds at venture capitalthe ventures capitalduring the second quarter of this year. Which country attracts capital? Which industry dominates the debate? Let’s talk numbers with the Michael Novogratz team.
Investments correlated with the price of BTC
Galaxy Research is an entity linked to Galaxy Investment Partnersa company founded and managed by Michael Novogratzis one of the leading figures in the crypto ecosystem. Regularly interviewed by the American media, he never misses an opportunity to give his optimistic opinion on industry news. Today, we’re going to be talking about the research sector, and more specifically about the latest report published on July 14th last and entitled Venture capital funds in blockchain and crypto, Q2 2023.
It comes as no real surprise to learn that investments have been drastically reduced. reduced from the heights of 2021 and that the second quarter of this year marks a new low not reached since the fourth quarter 2020. The correlation with the price of Bitcoin is also evident from the chart provided by Galaxy Research, with only a slight dip in recent months.
Among the interesting information in the report are those concerning the destination of investment attracted our attention, in particular the figure for United States. For with 45 % of all the venture capital funds on the planet, Uncle Sam is a veritable magnet for capital! It significantly outperforms United Kingdom and its 7.7%, Singapore (5.7%) and South Korea (5,4 %).
Let’s continue with a graph illustrating investment flows as a function of 18 sectors of activity related to the Web3.
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Trading/exchange dominates discussions and attracts capital
As can be seen, it is primarily the companies operating in the Trading/Exchange/Investing/Lending ($473 million, or 20% of capital deployed), which lead the way by a narrow margin over the Web3/NFT/DAO/Metaverse/Gaming (442 million or 19% of the total). All these data is freely available on the Galaxy Research website.
At the time of writingexplanation to these figures, the analyst teams note first of all that, despite the bad news that has been coming out of Washington for several months now, and despite the regulatory uncertainty weighing heavily on the country, capital continues to flow into the United States. Then, from a macroeconomicthe current period is clearly not favourable for risk assets, with rising interest rates which, combined with a largely bearish crypto market, is keeping investors away from crypto. Lastly, the implosion of several major players in the ecosystem has inevitably also played a role in the disenchantment with smart money for Web3.
But let’s end on a note positive with the investment amounts maintained in the so-calledprimingi.e. at the very beginning of a start-up’s history. Research shows that figures are stableThis would suggest that investors continue to believe in a positive future, and are still looking to bet on the right horse, even if it means abandoning projects that are a little more advanced. This faith in a positive future is also present in the Galaxy boss, Mike Novogratzwho recently expressed it in the American media.
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