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Done.In the first half of 2021, US private equity and venture capital returns continued the torrid pace that started in second quarter 2020. "And within less than a month and a half we had the initial fundraise target in the bank. "Within seven days we had all of the investment commitments," Obi Nwosu, one of its founders, told Reuters. Lisbon-based Fedi, an app designed to help people receive, hold and spend bitcoin, said this month it had raised US$4.2 million in seed financing. That is not the case anymore."Īdoption of crypto as an investment tool mushroomed last year, with the use of blockchain also gaining ground - even if the revolutionary changes from the technology promised to industries such as finance and commodities remain elusive.Īmong the mega US crypto deals in 2022: US$400 million raised by the US arm of crypto exchange FTX in January a US$450 million fundraising round by blockchain developer ConsenSys in March and US$400 million raised by stablecoin issuer Circle a month later.Īctivity is strong in Europe too, with US$2.2 billion of VC investment in the first half of the year. "There used to be existential risk being in the space - that the whole industry was just going to go away, it was all a dream. Rumi Morales, director of investments at Digital Currency Group, a major American VC, said the data reflected increasingly robust faith in the crypto and blockchain sector. The numbers contrast with general VC activity in United States, where deals fell to US$144.2 billion in the first half from US$158.2 billion in the same period last year as macro conditions and market turmoil chill investment. North America, long the hotspot for VC deals, has again been the focus of activity with about US$11.4 billion in the six months to June, versus US$15.6 billion for the whole of last year. In the last cycle the pain for those looking for funding was about 12 months." AMERICAN HOTSPOT "This will get a lot worse - we're a couple of months into this cycle. Though not all investors are so bullish in the face of the crypto carnage, not by any means.ĭavid Siemer, CEO of California crypto management firm Wave Financial, said there were signs of a pullback from the sky-high valuations of crypto firms last year. Yet some VCs are shrugging off the gloom, with many deploying substantial war chests as their faith in the underlying tech behind crypto coins remains strong. The data suggests a solid faith in the future of crypto and blockchain tech, despite a bruising six months for the industry.Ī double whammy of macroeconomic headwinds and blow-ups at major projects this year have seen bitcoin plummet about 65 per cent from its November record of US$69,000, with the overall value of the crypto market tumbling by two-thirds to US$1 trillion.Ĭompanies have shuddered as prices fall, with major US exchange Coinbase Global and NFT platform OpenSea among those to lay off hundreds of workers.
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VC funds offer financing to young companies they believe have strong growth prospects. "The current market conditions - I don't think they faze investors," said Roderik van der Graf, founder of Hong Kong investment firm Lemniscap, which focuses on crypto and blockchain. That puts investment on course to top the record US$26.9 billion raised last year, a warmer and happier time for bitcoin and co. In the first half of the year, VCs bet US$17.5 billion on such firms, according to data from PitchBook.
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Even as the crypto sector shivers in the bleak winter, venture capitalists are pouring money into digital currency and blockchain startups at a pace that's set to outstrip last year's record.