TLDR:
– Although crypto firms raised nearly $3 billion in venture capital funding, we are not close to the levels seen in 2022.
– PitchBook’s Senior Analyst Robert Le predicts it may take 3-5 years to reach the $23-$24 billion levels seen in 2022.
In a recent analysis, it was revealed that venture capital funding for crypto firms has reached almost $3 billion over 503 deals. However, this amount is still down 11% compared to the previous year. PitchBook’s Senior Analyst, Robert Le, stated that it may take several years to reach the peak levels of 2022, estimated at around $23-$24 billion. This delay is attributed to the fact that current funding is primarily focused on blockchain infrastructure rather than application layers.
Jacob Martin, a general partner at venture firm 2 Punks, expressed skepticism about returning to the heights of 2022, citing the different ecosystem and branding challenges that crypto projects face. One example mentioned in the article is Farcaster, which received a significant amount of VC money but has not been able to expand beyond crypto-native users.
Le highlighted the importance of investments in the application layer as opposed to just infrastructure, drawing a parallel to investing in Amazon Web Services over firms like Uber or Airbnb built on that infrastructure. He also discussed the potential in decentralized GPU networks due to the rising demand for computing resources in AI applications.
Overall, the article paints a picture of cautious optimism regarding the future of venture capital funding in the crypto space, with a focus on the need for meaningful applications to drive growth and value accretion.
