After a historic 2021, the 2022 financial year presented itself under the best auspices for the cryptocurrency ecosystem. But a cascade of scandals, a crypto crash and a bear market persistent rattles the sector, which has seen investors walk away over the quarters. Ultimately, although industry startups raised more than $30 billion in investment from venture capital funds in 2022, a similar level to 2021 ($31 billion), the end of the year ahead was characterized by from a descent into hell after the first quarter was over.
In the first three months of the year, when all the lights were still on, the money was flowing, as evidenced by the approximately $13 billion raised in some 1,100 transactions. One of the most significant was to be attributed to The Yuga laboratories, at the origin of the NFT Bored Ape Yacht Club collection (10,000 unique designs with the effigy of humanized signs), with a fundraising of 450 million dollars. But after this promising start, the mood quickly deteriorated.
A year ended with the weakest quarter of the last two years
Thus, the second quarter was characterized, in May, by accident of the stablecoin Terra, which caused the failure of the Three Arrow Capital fund and platforms such as Celsius Network and BlockFi. This earthquake cost investors $40 billion and saw more than $500 billion evaporate in just one week from the cryptocurrency market.
In the turmoil, ecosystem startups raised less than $10 billion between April and June. In the second half of the year, this slump worsened, with investments reaching $2.7 billion in the fourth quarter, with only 366 transactions recorded; that’s down more than 50% from the third quarter, when $6 billion was raised in 676 deals.
The last quarter of 2022 even recorded the lowest number of operations and invested capital in the last two years. In this context, 2023 promises to be particularly difficult for crypto startups, engaged in a desperate search for funding to guarantee their development.