The Crypto Funding Landscape Faces Challenges in 2023
The crypto funding landscape experienced a significant decline in 2023, with total investments dropping by 68% to $10.6 billion. This decrease was a sharp contrast to the previous year’s total investment of $33.2 billion and represented the lowest point since 2020.
Several factors contributed to this decline, including high-interest rates, the rise of artificial intelligence drawing attention away from crypto, regulatory crackdowns, and the fallout from notable crypto collapses involving FTX, Celsius, and BlockFi.
Coinbase Ventures: Optimistic About 2024
Coinbase Ventures, the ventures unit of crypto exchange Coinbase, remained optimistic despite the challenges of 2023. The firm believes that advancing regulatory clarity, protocol infrastructure maturation, institutional participation, and innovation in on-chain products will set the stage for a bright 2024. Coinbase Ventures plans to invest in areas that accelerate bringing more users onto the blockchain and sees opportunities at the intersection of AI and crypto.
Galaxy Ventures: A Challenging Landscape
Galaxy Ventures, the venture arm of billionaire investor Mike Novogratz’s Galaxy, expects the crypto VC environment to remain challenging in 2024. Successful businesses may have to raise funds at flat or down rounds due to limited capital entering the venture space. However, there could be more consolidation in the industry through mergers and acquisitions deals between larger and smaller firms. Startups with sustainable business models and demonstrated product market fit will continue to attract investment.
Animoca Brands: Very Optimistic About 2024
Hong Kong-based Animoca Brands is very optimistic about the crypto funding environment in 2024. With the rebounding crypto market, there is a shift in momentum that may represent the beginning of a new bull cycle. Animoca Brands expects gaming and AI with web3 components to attract more investment in 2024, particularly in Asia, the Middle East, and Europe.
Shima Capital: Cautiously Optimistic
Early-stage investor Shima Capital remains cautiously optimistic about crypto funding in 2024. The firm expects infrastructure, gaming, and tokenization verticals to receive more investment. Shima Capital continues to be active in the space, working with portfolio companies and conducting research as they believe crypto is still in its early stages.
HashKey Capital: Anticipating a Bullish Market
Asia-based venture capital firm HashKey Capital anticipates a bullish market in 2024. The firm plans to actively seek new investment opportunities, expand its asset management business into new markets, and launch various funds catering to different investment preferences.
Multicoin Capital: Huge Opportunities for Crypto in AI
Managing partners at Multicoin Capital remain bullish for 2024, especially for the Solana ecosystem. They also see huge opportunities for crypto in the AI revolution, such as crypto-enabled compute marketplaces and specialized cloud providers filling the shortage of GPUs. They expect an emergence of neobanks, DeFi primitives, payment apps, onramps and offramps, and DEXs to fill the gap left by centralized lending desks and exchanges that were wiped out in 2023.
Polygon Ventures: Bullish on Web3’s Innovation and Adoption
Polygon Ventures believes that the bottom is likely in for web3 financing and expects more investment in the new year. They anticipate funding to pick up for consumer-facing use cases like social, financial services, entertainment, and tokenization. They are also bullish on web3’s innovation and adoption accelerating in 2024.
NGC Ventures: Optimistic About Crypto Market and VC Funding
Three general partners at NGC Ventures in Asia remain optimistic about the crypto market and VC funding in 2024. NGC Ventures focuses on verticals like AI, crypto, Bitcoin Layer 2 networks, modular and zero-knowledge technology. They also see potential in intent-based protocols, decentralized physical infrastructure networks, decentralized science, and funding open-source projects with AI and decentralized machine learning models.
Hot Take: Crypto Funding Outlook for 2024
The crypto funding landscape faced significant challenges in 2023 but is expected to rebound in 2024. Despite the decline in investments, many venture capital firms remain optimistic about the future. Factors such as advancing regulatory clarity, maturation of protocol infrastructure, institutional participation, and innovation in on-chain products contribute to this optimism. Opportunities are seen in areas like gaming, AI, infrastructure, and tokenization. The industry may also witness consolidation through mergers and acquisitions. Overall, the outlook for crypto funding in 2024 is positive, with expectations of a bullish market and increased investment in various sectors.
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