Cointelegraph Research will analyze all bids and venture capital (VC) bids in the blockchain industry in the second quarter of 2022.
Looking at the total amount invested in the cryptocurrency industry in the second quarter, that will tell one story. However, a deeper dive into the data tells a different story. From a high level, the $ 14.67 billion invested in the second quarter is roughly flat compared to the $ 14.66 billion invested in the first quarter. But the bulk of this investment was in April, before the last two months of a sharp slump in global markets, which led even a bullish cryptocurrency investor to admit that the bear market had arrived.
The good news is that even though this has happened, funds such as Andreessen Horowitz (a16z) closed a $ 4.5 billion cryptocurrency fund and investments continued to flow into various sectors of the cryptocurrency industry.
Download the full report here, along with charts and infographics.
The Cointelegraph Research Center has a VC database that contains detailed information on contracts, mergers and acquisitions, investors, cryptocurrencies, funds and more. Using this database, Cointelegraph Research analyzes the numbers to find important developments in the industry. The report is just an overview of the highlights of the last quarter – not everything can fit into the 12-page quarterly report.
The numbers can lie
The total value of individual contracts in the blockchain industry remained stable at $ 14.67 billion in the second quarter, just over $ 14.66 billion in the first quarter. This may indicate an inaccurate conclusion that there is no change in the development of investments in VC and everything is undergoing a huge exponential growth process.
The contraction in traditional financial markets (TradFi) has been a headwind for the cryptocurrency market. The change in risk has had an unexpected impact on different sectors of the cryptocurrency. This downward pressure was only exacerbated by the collapse of Terra’s stablecoin, which significantly reduced the overall market value. Macroeconomic forces have influenced venture capital firms to take a small step back and approach projects with more caution and probably less capital allocation to reduce their risk risk in the event of support for a bad project.
The number of individual bids in the blockchain industry was over 620, a hundred more than in the previous quarter. But the average value of each contract fell by more than 16% to 26.8 million dollars, which may indicate risk averse behavior on the part of VC and investment firms. So, although the data shows signs of slowing down the inflow of investments in the cryptocurrency space, the interest in helping to build the next generation of blockchain and cryptocurrencies still seems to be high.
Web3 will be the sector most interested in VCs
Of all the major sectors of the blockchain industry in distributed finance (DeFi), centralized finance (CeFi,) blockchain infrastructure, Web3 and unchangeable tokens (NFT,), DeFi has basically always been king for the inflow of VC capital. That all changed in the second quarter, when Web3 received about 42% of all individual bids, leaving DeFi at a long second with 16%. This trend became even more pronounced when the most active investors were analyzed, accounting for 42% of all business activity in the second quarter, which is a decrease from 65% in the first quarter.
Seven of the ten most active securities companies chose Web3 as their investment sector. The pressure on the active participation of companies to seek to become part of the overall concept of Metaverse is the driving force behind this new development. In the next report, the Cointelegraph research team will divide the Web3 sector into different parts to see where VC interest is heading in the space.
Metaverse Investment takes the lead
The top ten offers were in the range lower than in the previous quarter, but also had a large $ 2 billion contract with Epic Games to expand by combining the sports experience and crypto metaverse. Metaverse and Web3 were a recurring theme in these big deals, as was the CEO of the FTX exchange, Sam Bankman-Fried, becoming a “lender of last resort” and raising funds for companies such as BlockFi, which was negatively affected by the recent market downturn. .
Animoca Brands ahead in the M&A game
Mergers and acquisitions (M&A) can provide companies with great strategic opportunities, especially in times of turmoil. Animoca Brands seems to take these strategic opportunities seriously, acquiring three GameFi companies and another in education and marketing.
Two big names were also involved in the acquisition – eBay and Napster. eBay acquired Known Origin, a marketable symbol (NFT), to help expand its product offering to customers. Algorand and Hivemind acquired Napster to promote the NFT music market to improve access for consumers and composers.
The report subtracts Extensive database of Cointelegraph Research Terminals along with an analysis by Michael Tabone, a senior economist at Cointelegraph Research. Michael has a broad background in economics, business, finance, cryptocurrency, blockchain technology and working with new technologies. In addition to working for Cointelegraph Research, Michael Ph.D. a candidate who is working on his thesis, which focuses on the theory and application of decentralized independent institutions, or DAOs.
Keychain Ventures is a cryptocurrency investment company that is involved in investing various resources in the blockchain space. Keychain Ventures, along with Cointelegraph Research, will present quarterly interviews with VC companies as well as cryptocurrency / blockchain projects that have recently gone through a funding round. These interviews will open up different perspectives of all parties on investment methods.
This article is for informational purposes only and does not represent investment advice or investment analysis or offers to buy or sell financial instruments. Specifically, the document does not replace individual investments or other advice.
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