• Crypto companies raised $2.6 billion in Q1 2023, despite a four consecutive quarter decline in investment activity.
• PitchBook’s report showed mixed valuation trends, with seed, late and early stage rounds at different levels for the quarter.
• Despite the decline in capital invested and deals completed compared to last year, venture capital firms were able to close many deals and make significant investments in the crypto space.
Crypto Companies Raised $2.6B in Q1 2023
A new report by global capital markets data platform PitchBook revealed that crypto-focused companies raised $2.6 billion across 353 investment rounds in the first quarter of 2023. The amount raised signaled a 12.2% and 11% decrease in the quarter-on-quarter total number of deals and deal value, respectively. It also represented the fourth consecutive quarter of decreasing investment activity, as the amount was the lowest capital invested and deals completed since Q4 2020.
Valuation Trends Mixed
PitchBook’s crypto report disclosed that valuation trends were mixed, with seed, late and early-stage rounds at different levels for the quarter. While the seed and late-stage rounds were up 33.3% and 209% compared to 2022, early-stage rounds slumped by 16.7%. The $2.6 billion raised by startups across 353 deals show a decline of 78% and 64.4% from last year, respectively.
Venture Capital Deals
The report demonstrates that while the 2022 crypto winter persists, venture capital firms have been able to close many deals and make significant investments in the crypto space despite declining investment activity for four consecutive quarters this year alone..
Decline May Continue
PitchBook predicted that this decline might likely continue however there is positive outlook for cryptocurrency market as investors continue to invest money into it despite having lower returns on their investments than before due to decreased demand from retail investors .
Cryptocurrency Market Outlook
Overall cryptocurrency market outlook still remains optimistic although it may not be totally immune from traditional financial markets but will continue to attract more mainstream investors who are seeking alternative asset classes that could provide higher returns than traditional assets such as stocks or bonds .