Funding for the Blockchain technology industry declined in the fourth quarter of 2022, a new search by ‘Blockdata’ has observed.
Blockdata indicates continuous quarterly declines in funding through 2022, resulting in a total VC funding of $3.7 billion, down from $9.6 billion in Q4 2021.
It said that from $32 billion to $29 billion, the overall funding for blockchain and cryptocurrency startups decreased by 11% annually.
According to the report, although sizable VC investments were made, particularly by firms such as the Amber Group, which raised $300 million in a Series C round in December 2022, events such as the collapse of FTX affected the performance of most firms.
Other reasons included the collapse of the Terra ecosystem in May 2022 which took it down with it, and many casualties including bankruptcies of cryptocurrency firms, Celsius and Three Arrows Capital.
This is in addition to global macroeconomic factors in the capital markets, such as rising interest rates and inflation.
The report said that a 34% decrease from Q3 2022 in the value of venture capital funding during the final quarter of 2022 was observed.
This showed a sharp decline of 67% and 53% when compared to the first and second quarters.