June ended with a significant decrease in venture capital investments, with only $779.32 million raised in 62 individual deals, according to data from the Cointelegraph Research Venture Capital Database. Despite the Federal Reserve’s decision to pause interest rate hikes, the macroeconomic climate remains uncertain due to geopolitical tensions and continuing efforts to control inflation. Investors have become more cautious and risk-averse, with the three-month growth trend coming to a halt.
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However, this does not necessarily mean that the market is bearish, as the overall trend for 2023 is still positive. Additionally, the recent influx of Bitcoin exchange-traded fund (ETF) applications from BlackRock, VanEck, WisdomTree and Fidelity, as well as Ripple’s legal victory over the Securities and Exchange Commission, have helped boost investor confidence. The crypto market has responded positively to these developments, but venture capital investments tend to be more conservative and less reactive to market changes due to the uncertain global economic conditions.
Blockchain infrastructure still dominant
The Cointelegraph Research Venture Capital Database reveals that the breakdown of deals in June didn’t drastically change and that the investment focus of VCs remained relatively stable. Blockchain infrastructure still led the market with 20 individual deals and over $493 million in funding.
Decentralized finance (DeFi) reclaimed some ground with 20 deals and over $144 million invested. Surprisingly, Web3 had less attention from venture capitalists in June, with about $107 million over 18 deals. Centralized finance (CeFi) and nonfungible tokens (NFTs) again closed out the list with about $32 million and $2 million of investment and one and three individual rounds, respectively.
The largest deal in June was Islamic Coin’s (ISLM) $200 million raise from Alpha Blue Ocean’s ABO Digital. The project aims to create a digital financial instrument for Muslims around the globe, and its total funding has surpassed $400 million. Far behind Islamic Coin was the $43 million Gensyn deal led by a16z Crypto with participation from CoinFund, Canonical Crypto and others. Gensyn is a blockchain-based artificial intelligence project connecting buyers and sellers of compute power.
Another entry on the list is Mythical Games, which raised $37 million in Series C deal led by Scytale Digital with participation from ARK Invest, Animoca Brands and others. The funds will be used to launch a new marketplace and pursue other revenue-generating initiatives. Bitpanda Pro, meanwhile, closed a Series A round for $33 million led by Peter Thiel’s Valar Ventures and rebranded to One Trading. The round will help expand its reach to professional traders and institutions throughout Europe.
Although March, April and May saw VCs increase their capital inflows into the blockchain space, the trend was reversed in June, signaling that more uncertainty may lie ahead. However, slight deviations month-to-month are less important than the overall trend, which is steadily rising. With the spot ETF fillings and Ripple-SEC lawsuit yet to impact the crypto venture capital market, July and August are expected to offer indications of which will have greater weight — general macroeconomic conditions or web 3.0 investment opportunities.
To keep on top of VC activity, follow the Cointelegraph Research VC Database, which is updated weekly and tracks over 6,000 deals from 2012 through the present day.
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