Crypto Venture Funding Declines Sharply But FTX Impact Remains Unclear
Venture capital funding for blockchain and cryptocurrency startups drops for the third consecutive quarter as the industry navigates a series of high-profile collapses. Despite the downward trend, investors and builders continue to show resilience in the web3 space.
Blockchain and cryptocurrency startups experience a significant downturn in venture capital funding throughout 2022, with capital raised falling every quarter since a peak in the final months of 2021. This decline occurs alongside a broader venture capital slowdown and a series of devastating industry crises, including the spectacular collapses of Terra/Luna, Three Arrows Capital, and FTX.
Crunchbase data reveals a stark downward trajectory, dropping from $9.3 billion across 615 deals in the fourth quarter of 2021 to just $3.3 billion across 408 deals in the third quarter of 2022. Despite these shrinking numbers, web3 founders and venture investors maintain a surprisingly optimistic outlook and continue to launch and scale new projects.
While it remains too early to determine the exact impact of the recent FTX meltdown on new deal-making, the data indicates modest resilience within the blockchain sector. Venture capital datasets naturally improve and fill in over time, meaning the true extent of any FTX-related freeze will become clearer as more investment records are finalized and reported in the coming months.