Web3 Venture Funding Experiences a Serious Decline
The Web3 sector has seen a recent resurgence, with various tokens recovering from a bearish winter in 2022.
Despite this, venture capitalists are showing little interest in investing in the crypto industry.
According to a report by Crunchbase, venture funding dropped from $9.1 billion in Q1 2022 to $1.7 billion in Q1 2023, an 82% decline year-over-year, indicating bearish sentiment toward web3 projects.
The $1.7 billion invested in the first quarter of 2023 is the lowest since Q4 2020 when web3 was in its early stages.
This decline is attributed to the events of the second half of 2022, including the collapse of Terra Luna and FTX, which led to second thoughts from investors.
As a result, the number of funding rounds has decreased, and only three financing rounds exceeded $100 million in the past quarter, compared to 29 a year ago.
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However, these events should not be viewed negatively, as they have exposed some bad actors in the crypto ecosystem and highlighted the need for solid use cases. It is expected that the web3 industry will emerge stronger despite the current funding decline.
The leading coin, Bitcoin, has recovered and hit $30,000 in Q1, although it is currently trading at around $27,590, down 9% in the past seven days.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
