According to a survey by Pitchbook, the total funds raised by crypto startups this year are expected to surpass 2021.
In the first nine months of the year alone, the crypto startups managed to raise almost 200,000 euros 20 billion dollars of venture capital companies. At least that’s what a survey by the market research company Pitchbook shows. Over the past year, over $21.2 billion has been invested in crypto companies.
2022: a difficult year for the crypto market
According to Pitchbook, venture capitalists invested $1.5 billion in crypto startups in the third quarter of 2022, up 44.5% from the same period last year. If this momentum continues, the startup total could continue to grow in 2023.
However, Bitcoin, the leading cryptocurrency on the market, is down 67% year-on-year. To CoinGeckoBitcoin’s price is currently hovering between $16,800 and $17,200, down more than 75% from its all-time high of $69,000 set in November 2021.
etherthe second largest crypto by market cap, is trading at nearly $1,250 after a record high of $4,800 in November 2021.
When the market was already in crisis, the collapse of crypto exchange FTX dashed investors’ last hopes. Between June and August, other crypto giants such as Celsius Network and Voyager Digital also filed for bankruptcy after the fall algorithmic stablecoin VAT
That is, the index Emerging Tech Indicator (ETI) by Pitchbook shows that the total funds raised by crypto startups have returned to normal in the third quarter. “We have recorded 10 ETI transactions with a size of US$100 million or more. Although this figure exceeds the quarterly average of 5 transactions recorded since 2015, it is still lower than in the fourth quarter of 2021 and the first quarter of 2022, when the quarterly average peaked at 22 transactions.
Legal Uncertainty: A Problem Slowing Crypto Growth
Robert Le, Crypto Analyst at PitchBook, added: “The lack of regulation and clear guidelines remains one of the biggest impediments to crypto market growth. Mass adoption is unlikely to be achieved without new laws and policies being enacted.”
While the European Union sets the final milestones Crypto Asset Markets Bill (MiCA), the latter will not come into force until 2024. The UK Treasury is also working to develop a legal framework for crypto. Likewise, the US Congress has several crypto laws pending approval.
Next year is therefore likely to be a year of upheaval. In fact, the collapse of FTX and its catastrophic impact has prompted lawmakers around the world to accelerate regulation of the crypto market.
Therefore, despite the decline in crypto investments over the past two quarters, the creation of a regulatory framework could bring a breath of fresh air to the market. However, many analysts are not optimistic about the price development in the first quarter of 2023.
While investors avoid risky assets, the market cap of the crypto market does not exceed $800 billion. However, Korbit expects a trend reversal in 2023. Monetary policy limiting the surge in inflation.
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