Venture capital investment in crypto continues to be massive. A new study has found that in Q1 of 2022, venture capital firms set several new records in their investment in the crypto industry.
Blockchain industry secures over $11 Billion in Venture Capital
The Block Research’s review of blockchain private funding, as well as mergers and acquisitions (M&As), revealed that venture capital firms invested a record-breaking $12.5 billion during the first three months of 2022. This was done in an equally record-breaking 624 financings deal.
The 2022 dollar value of VC investment is a 220% increase from Q1 of 2021. Q1 of 2022 is also the seventh consecutive first quarter in which VC firms have surpassed their previous investment record, according to the report.
The blockchain/crypto sector received nearly $12.5 billion in venture funding, a sector high… The 624 funding deals that occurred last quarter are also a record for the blockchain sector, The Block Research said.
Meanwhile, the NFT/gaming crypto sub-sector was the recipient of the lion’s share of the investment. Projects in the sub-sector made up roughly 36% of all investment deals. In contrast, investments in DeFi projects dropped for the fourth consecutive quarter, as they attracted 20% of the investments.
Equally impressive during Q1 was the number of M&A deals made. There were 56 M&A transactions with a total value of $907 million across the industry. The figure makes Q1 2022 the second-highest quarter by number of M&A and third-highest by volume in the industry’s history.
What has been attracting VC firms to crypto?
During 2022, the crypto industry has seen many seasoned crypto venture capital firms as well as totally new players joining funding rounds. The usual suspects in crypto funding including Andreessen Horowitz, Tiger Global, and Paradigm have made the rounds recently.
Some traditional venture capital firms like Sequoia, and Google Ventures have also participated in funding crypto start-ups to reach new attractive valuations this year.
However, it is worthy of note that venture capital firms have been bullish on the crypto industry since last year. In 2021, VC firms invested over $33 billion in the industry according to Galaxy Digital’s finding.
VCs have continued to bet big on the crypto industry despite regulatory clarity, indicating a firm belief in the long-term prospect of the industry. This is also a testimony of how much the crypto industry, with its valuation of over $2 trillion, has matured and come to be adopted.