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Investment In Crypto Companies Down By 42% In 2022: Report
The amount of money invested in the cryptocurrency industry increased dramatically in 2021. Over the course of the year, the industry saw a record $37 million invested, which is the highest cumulative amount ever invested
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Investments in cryptocurrency companies fell 42.5 per cent year on year to $21.26 billion due to bearish market conditions, according to a CoinGecko report. However, the total amount raised was still greater than the total amount raised each year from 2018 to 2020.
The amount of money invested in the cryptocurrency industry increased dramatically in 2021. Over the course of the year, the industry saw a record $37 million invested, which is the highest cumulative amount ever invested. The report noted that, despite low numbers in comparison to 2021, companies fared better than all other years, namely 2018-2020, indicating the cryptocurrency industry’s growth over the last five years, which has resulted in more financial backing and increased interest from institutional investors.
In terms of funding breakdown by quarter, investments in crypto companies decreased in each successive quarter of 2022. In 2022, funding for cryptocurrency companies decreased from $8.72 billion in the first quarter to $5.92 billion in the second quarter, $3.61 billion in the third quarter, and finally $2.99 billion in the fourth quarter.
It is also necessary to compare 2021 quarter-by-quarter figures. In the first quarter of 2021, crypto companies raised $5.58 billion, fueled in part by increased institutional interest in 2020. Following that, each quarter reaffirmed the growing interest in the crypto space, with companies raising $7.43 billion in the second quarter of 2021, $8.99 billion in the third quarter, and $15.00 billion (+66.8 QoQ) in the fourth quarter. Prior to 2021, the highest amount of funding in a single quarter was $8.19 billion in 2018 Q2.
With the crash of FTX, one of the world’s largest crypto exchanges led by its former CEO, Sam Bankman-Fried, in November 2022, global crypto exchange Binance’s chief executive officer Changpen Zhao established a ‘industry recovery fund’ to support’strong’ crypto ventures. The cryptocurrency industry has had a very difficult year globally as well as in India, with the crash of FTX, one of the world’s largest crypto exchanges led by its former CEO, Sam Bankman-Fried, in November 2022, prompting global crypto exchange Binance’s CEO Changpen Zhao to establish a ‘industry recovery fund’ to support’strong’ crypto ventures that may be facing a liquidity crunch.
In India, cryptocurrency exchange WazirX, operated by Zanmai Labs, is currently under investigation by the ED in a money laundering case, as a result of which the ED conducted searches on one of WazirX’s directors and froze the exchange’s bank balances worth 64.67 crore in August 2022.