UpdatesJan 12, 2023

Cryptocurrency projects obtained over 40% less funding in 2022 than in 2021

Virtual currency companies raised almost $16 billion less last year than in 2021.

The cryptocurrency winter created a negative sentiment on the market. It also translated into a decrease in the interest of many investors in projects in this sector. According to data provided by CoinGecko, companies in this industry managed to obtain financing in the amount of USD 21 billion in 2022. Interestingly, however, this is as much as 42.5% less than in 2021.

Cryptocurrency projects with over 40% less funding in 2022

The slump in the virtual currency market has discouraged many of its observers from investing. Negative sentiment towards cryptocurrencies still persists. Investors continue to be concerned about the current price levels and the possibility of further declines.

Research conducted by the CoinGecko platform shows that in 2022 there was a decrease in the amount of capital allocated to the development of companies in the industry. Last year, they raised only $21.26 billion. A large part of it was collected in its first half, when the sector was in better shape.

Bankruptcies of numerous companies affected investors' moods. The failure of the Terra ecosystem, the collapse of the cryptocurrency lender Celsius Network, or the well-known cryptocurrency hedge fund Three Arrows Capital (3AC), and later also the FTX exchange, had a part in this.

CoinGecko compared data from 2022 to those from 2021. At that time, entities from the cryptocurrency market ended the collection at the level of 37 billion dollars. The accompanying boom and rising prices of virtual currencies encouraged investors to invest.

Another interesting phenomenon is that despite a decrease of 42.5% in 2022 compared to the preceding 2021, it turned out to be better than 2018 (where USD 16.22 billion was collected), 2019 (USD 4.48 billion) and 2020 ($4.40 billion). According to experts, this phenomenon may be related to the development of the industry at the turn of the last 5 years, as well as the entry of more institutional investors into the market.

One of the biggest rebounds in 2022 was Andreessen Horowitz, also known as a16z. This company managed to raise as much as 4.5 billion dollars. The company has declared that it will use the bear market to invest in blockchain startups and digital assets.