Crypto funding drying up – Bloomberg

Investors are pulling back on funding crypto startups following the implosions of Silicon Valley Bank and FTX exchange    Read Full Article at RT.com

Crypto funding drying up – Bloomberg

Global venture capital investment in the sector has hit its lowest level since 2020

Private funding in crypto startups has fallen dramatically this year as the industry reels from scandals, bank implosions and regulatory uncertainty, Bloomberg reported this week, citing data from research company PitchBook.   

Global venture capital (VC) funding for crypto startups totaled $2.4 billion in the first quarter of 2023, its lowest level since 2020, according to PitchBook. The figures represent an 80% slump in private VC investment compared to an all-time high of $12.3 billion recorded in the same period last year, data showed.  

Crypto startups have faced a tougher fundraising environment following the bankruptcy of crypto exchange FTX. Deals have become slower to convert to capital as cautious investors are now carrying out months of research with higher scrutiny before making funding decisions.   

“It’s not going to be based on FOMO [fear of missing out] or what other investors are doing,” PitchBook analyst Robert Le said.

Echoing his comments, co-founder of the Berlin-based M^Zero Labs startup, Luca Prosperi, said that his company had begun fundraising talks in October, shortly before the collapse of FTX, and had finally managed to secure $22.5 million in funding this month.  

The implosion of the largest crypto currency exchange “forced investors to keep asking more questions,” Prosperi said.  

READ MORE: Bitcoin price near doubles in three months

Le claimed that the drop in crypto funding was “not a surprise,” and pointed to the collapse of Silicon Valley Bank as another major deterrent for investors. The lender widely relied on venture-backed companies, and currently “there’s still a lot of fear about what’s going to happen since the macro environment is still very uncertain,” Le added.

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