Venture capital investments in cryptocurrency startups decline
Venture capital investments in cryptocurrency companies have seen a significant decline of over 70% in the past year. Only $520 million was raised across 83 projects in June 2023, marking the lowest-funded month to date.
Main breakdowns:
- RootData data reveals a downward trend in venture capital interest within the digital asset space.
- Infrastructure category remains the frontrunner but experienced a nearly 50% decrease in funding from the previous month.
- UK-based startup Gensyn AI secured an impressive $43 million in a Series A funding round led by a16z crypto.
- Institutional traders are shifting their focus from blockchain to artificial intelligence (AI).
- Ethereum is the cryptocurrency with the most funded projects, followed by Polygon (MATIC).
Institutional traders turn towards artificial intelligence
A recent report by JP Morgan reveals that institutional traders are shifting their attention away from blockchain technology towards artificial intelligence (AI). Over half of the surveyed traders believe that AI and machine learning will be the most influential technologies shaping the future of trading in the next three years.
Main breakdowns:
- Centralized finance (CeFi) and the gaming sector are other popular categories attracting funding.
- Ethereum and Polygon (MATIC) have the most funded projects in the past year.
- The United States receives the largest portion of funding, but this may change as market dynamics evolve.
- Coinbase Ventures, Hashkey Capital, and Shima Capital are the most active venture capital firms.
Challenges and new trends in the crypto industry
The declining interest from venture capitalists in the crypto asset space can be attributed to factors such as company actions, regulatory clampdowns, and banking turmoil. Meanwhile, alternative sectors like artificial intelligence have garnered significant attention from investors.
Main breakdowns:
- AI’s ability to cater to a broader audience has contributed to the shift in investor interest.
- Presale investments like LolaCoin are trailblazing forward thanks to community support.
- The crypto industry faces challenges and will need to adapt to new trends and technologies.
Hot Take:
The decline in venture capital investments in cryptocurrency startups is concerning, but the shift towards artificial intelligence presents new opportunities for the industry. While venture capitalists may be veering away, presale investments like LolaCoin demonstrate the strength and potential tied to community support, showing that the crypto industry can adapt and thrive.
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