Venture Capitalists Invested $14.2 Billion in Crypto H1
- Venture capitalist investment in the crypto space in H1 2022 exceeds that of the years before 2021.
- Crypto projects in Africa are gaining significant attention from investors.
Venture capitalist firms remained active in the crypto market during the first half of 2022, despite the bear market. According to reports, VC firms poured in about $14.2 billion into blockchain projects across more than seven hundred deals.
A new report released by accounting giant KPMG details the level of investments during H1. KMPG’s report featured data showing the market’s growth and a possible decline in the second half of the year. According to the report, the crypto trading platform Trade Republic made the largest investments in the first half of 2022 ($1.1 billion).
Fireblocks, a digital asset custody platform, had investments of up to $550 million. Crypto exchange FTX and the Ethereum software provider ConsenSys made about $500 million and $450 million, respectively. The Americas received the most venture capital funding ($27.2 billion), while the EMEA experienced a record-breaking amount of funding for a 6-month period ($16.6 billion).
The report noted that the first half of 2022 showed more progress than the years before 2021. These figures mirror the growing popularity of digital assets and the interest of investors in the industry. Despite the impressive figures, Anton Ruddenklau, KPMG’s global leader of fintech, predicts a decline in investment for the remainder of the year.
According to Anton, several factors, including the success of 2021 and H1 2022, will trigger a drop in investment figures. Anton further highlights a likely recession, rising inflation, higher interest rates, and the Russia-Ukraine war as other reasons.
Data from July confirms a decline in monthly inflow from VC firms, supporting KPMG’s projection of a dip in cryptocurrency investment. Ruddenklau anticipates that retail businesses that sell coins, tokens, and NFTs will particularly feel the decrease in interest in and investment in cryptocurrencies.
Alexandre Stachtchenko, director of blockchain & crypto assets at KPMG France, believes crypto firms can stay on top of the bear market and the low turn of investment from VC firms. Alexandre advised crypto firms to employ healthy risk management policies and manage strong costs to survive the bear market.
Of course, some cryptos will die out — particularly those that don’t have clear and strong value propositions. That could actually be quite healthy from an ecosystem point of view because it’ll clear away some of the mess that was created in the euphoria of a bull market. The best companies will be the ones that survive.
Along with Deloitte, EY, and PwC, KPMG is one of the world’s four biggest audit and accounting firms. These organizations, commonly referred to as the “Big Four,” generated more than 157 billion dollars in worldwide revenue in 2020.