In June, the crypto venture capital market saw a deviation from the three-month trend of increasing investments. The month ended with a 29.73% decrease in venture capital investments. A total of $779.32 million raised in 62 individual deals. This decline is attributed to the unchanged macroeconomic climate due to geopolitical uncertainties and ongoing efforts to control inflation worldwide.
Despite the Federal Reserve’s decision to halt interest rate hikes in June, investors remained cautious. This was leading to a halt in the growth trend observed in the previous three months. However, this is not necessarily a bearish signal as the overall trend for 2023 remains upward.
Positive Developments in the Crypto Market
The crypto market has seen some positive developments recently. Including a series of Bitcoin exchange-traded fund (ETF) applications from BlackRock, VanEck, WisdomTree, and Fidelity. Ripple’s legal victory over the Securities and Exchange Commission was a bullish signal. These events have improved the market mood, but VC investments, which are typically a lagging indicator, have not yet responded due to the inherent caution of institutions.
Investment Focus Remains Stable
The breakdown of deals in June remained relatively stable, with blockchain infrastructure leading the market with 20 individual deals and over $493 million in funding. Decentralized finance (DeFi) followed with 20 deals and over $144 million invested. Web3 was less popular among venture capitalists in June, with about $107 million over 18 deals. Centralized finance (CeFi) and nonfungible tokens (NFTs) again closed out the list with about $32 million and $2 million of investment and one and three individual rounds, respectively.
Notable Deals in June
Islamic Coin’s (ISLM) was the largest deal in June. It raised $200 million from Alpha Blue Ocean’s ABO Digital. The project aims to create a digital financial tool for Muslims. Its total funding has now passed $400 million.
Gensyn raised $43 million. It is a blockchain-based AI project. It connects buyers and sellers of compute power. a16z Crypto, CoinFund, Canonical Crypto, and others participated in the deal.
Mythical Games raised $37 million in a Series C deal. The funds will launch a new marketplace. Scytale Digital led the deal with participation from ARK Invest and Animoca Brands.
Bitpanda Pro closed a Series A round for $33 million. Peter Thiel’s Valar Ventures led the round. The company rebranded to One Trading. The funds will help it reach professional traders and institutions in Europe.
Looking Ahead Crypto Venture Capital Funding
While March, April, and May saw VCs increase their capital inflows into the blockchain space, the trend was rejected in June, signaling that more uncertainty may lie ahead. However, slight deviations month-to-month are less important than the overall trend, which is steadily rising. With the spot ETF fillings and Ripple-SEC lawsuit yet to impact the crypto venture capital market, July and August are expected to offer indications of which will have greater weight — general macroeconomic conditions or crypto market hype events.
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