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Crypto VC Funds Are Still Growing Rapidly

Crypto VC Funds and Firms Are Still Growing

Crypto VC funds are seeing exponential growth even though a declining market has set in. Venture capital firms are still on track to break last year’s record of investments.

Venture capitalists are investing millions of dollars in cryptocurrencies. The crypto community is growing rapidly, and this means that there are many opportunities for investors to continue to make money.

Crypto Growth & Opportunity Still In Hyperdrive

While the crypto VC fund industry has been on the rise for the past several years for many firms, 2022 continues to see the momentum surge. The crypto community is growing exponentially and there are hundreds of crypto companies being formed as the current bear market goes largely ignored.

More and more investors are interested in investing in crypto ventures and are simply waiting out the current market conditions. With fewer opportunities for high returns outside of crypto, many are looking for ways to invest their capital and drive growth of the digital asset industry.

Even with a current bear market in play, venture capital firms are still on track to break 2021's record high of investments in to blockchain and other crypto startups in the face of a "Crypto Winter" that has sent multiple cryptocurrency projects to new yearly lows.

VC funds are committing massive amounts of new capital into blockchain and Web3 startups, and by the end of next year, are subject to surpass the total amount of funding these crypto VCs funds have already committed to the space in prior years.

Where Crypto VC Funds & Firms Are Most Active

The United States is the biggest VC funding hotspot over the past few years, and the latest data shows that this trend is still the same. North America's crypto markets will likely continue to attract more investors due to lower prices, and capital on the balance sheet being available. 

This is creating a stronger pipeline for new startups to enter the market, especially those with high utility use cases such as GameFi.

GameFi Has Generally Ignored The Bear Market

GameFi is getting more and more attention from investors, who are now pouring millions of dollars into platforms focused on gaming, betting, and similar digital assets. These gaming segments received more capital than projects within trading and lending.

We expect more interest in GameFi as we see big names such as Epic Games, SEGA, and Bandai Namco take interest in the Metaverse and blockchain investing.

It is interesting to see that a focal-point of investments made so far in 2022 are in GameFi utility tokens. This is understandable because other tokens are more complex than GameFi utility tokens to understand at times, but it’s a clear sign that the demand is increasing steadily.

Multi-Chain Solutions Are On The Radar

Developers are also increasingly targeting multi-chain ecosystems. For example, two leading blockchain games, DeFi Kingdom and STEPN, have extended to two chains already. Gaming has also been one of the least affected sectors in crypto, through play-to-earn games and game-related NFTs.

As the old saying goes, gamers are going to game, regardless of economic conditions. The same GameFi NFTs and "Play To Earn" games comprise the least affected sector in all of crypto during the current bear market, per DappRadar.

Image Credit: DappRadar

What Spurred The Bear and What's Next?

Central banks around the world started raising interest rates aggressively this year, as well as enacting unconventional monetary policies to support the economy and to prevent a full-blown recession.

The value of the entire crypto market has shrunk since its peak last year, the value of Bitcoin specifically has crashed more than 65% since the record high set in November 2021. The price of other cryptocurrencies have collapsed more sharply.

But, with multiple new catalysts on the horizon after Ethereum's Merge to PoS and an appetite for continued investment in the crypto VC fund space, blockchain has solidified itself for continued extreme growth in the years to come with the assistance of this influx of venture capital.