Despite the prevailing bearish trend in the crypto market, venture capital firms closed several deals worth billions in the first quarter of 2023.
data from Pitchbook’s crypto report for the first quarter of 2023 revealed that crypto firms generated $2.6 billion through 353 investment rounds.
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Although the level of deals by companies indicated the viability of the crypto space, there is evidence of its fragility.
Report Highlights Decline in number and value of investment deals
According to the report, the first quarter of 2023 saw the lowest amount of capital invested in the crypto space since 2020.
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Total deals declined by 12.2% from the previous quarter, while quarter-on-quarter deal value declined by 11%.
The report noted that investment activity declined for the fourth consecutive quarter for VCs in the first quarter of 2023.
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Specifically, the number and value of VC deals decreased by 64.4% and 78.0%, respectively, from the same quarter in 2022.
Furthermore, the report indicated a mix in valuation trends. Compared to the full year of 2022, seed and late-stage rounds grew by 33.3% and 209.2%, respectively. But early-stage visits declined by 16.7% during the same period.
Also, the report states that the crypto bearish trend may continue. But the space still has some positive outlooks.
For example, Layer 2 scaling solutions are doing very well, maintaining their growth from last year.
The data highlighted Blockstream, a blockchain-based firm, that raised $125 million to finance bitcoin mining infrastructure.
In addition, another company committed to developing a zero-knowledge Ethereum virtual machine scaling solution, Scroll, has performed well. The firm raised $50 million in a later stage VC round.
Overall decline in the crypto market
The crypto market continued to show red charts as most of the assets saw more losses in their prices. Next, Cumulative Crypto Market Cap denied in the last 24 hours. Also, the total crypto market volume fell by 8.10% to $42.75 billion within the last 24 hours.
The primary crypto asset bitcoin has been struggling for the past few days. according to data from coinmarket capThere has been a steady decline in the price of bitcoin over the past week.
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The coin declined from the $29,000 area to the $26,000 level. Seven-day price action shows BTC down more than 9%.
At the time of writing, bitcoin is trading on $26,759 After losing minor gains in the last 24 hours. Its market cap now stands at $511 billion with a market dominance of 46.30%.
Altcoins are also showing a declining trend in prices. Ethereum is down 0.21% over the past 24-hours as the price hits $1,800. Its seven-day active price shows a decline of more than 7.40%.
Featured image from Pixabay and Chart from TradingView.com
