Venture funding for crypto startups amounted to $6.76 billion from April through June. Compared with Q1 ($9.85 billion), the figure fell by 31%, writes Bloomberg.
The agency cited data from research firm PitchBook.
“The digital asset market began slowing in November-December, and deals were still under discussion. They were closed in the first quarter,” explained Robert Le, fintech analyst at PitchBook.
According to the analyst, the second-quarter data provide a more accurate picture of the industry’s situation. There is now more doubt when closing deals, he added.
Bloomberg found explanations for this in the Terra collapse, as well as serious Celsius problems and Babel Finance, and also waves of layoffs at Coinbase, Gemini and Crypto.com.
David Pakman, managing partner at CoinFund, said that many deals had fallen through in recent weeks, and investors frequently withdrew buy-out offers.
“What you’re seeing now is a roughly 20% drop in seed-stage valuations, about 50% in Series A, and around 70% in Series B and beyond,” explained the specialist.
The expert urged the companies backed by his firm to accumulate cash, saying they would need to weather the next two years, as the downturn will not end “in a month.”
The agency noted that not everyone shares such a view. In particular, Multicoin reported the creation of a fund worth $430 million.
Lightspeed has formed a specialized division focused on blockchain. The company raised $7.1 billion across four new vehicles that invest in fintech and crypto startups.
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