Crypto Investment Sees Downturn in Q2 2023: Galaxy Report
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The crypto and blockchain sectors experienced a downturn in the second quarter of 2023, according to a report by Galaxy Asset Management. Investment in the sector reached a new low, totaling $2.32 billion, marking the lowest since Q4 2020. This downward trend began after a peak of $13 billion in Q1 2022, and the decline is evident when comparing the funds raised over the last three quarters to the investments in Q2 of the previous year.
Although the capital invested in the crypto sector has not yet stabilized, there was a slight increase in deal activity during Q2 2023. A total of 456 deals were completed, up from 439 deals in the previous quarter. This increase was primarily driven by Series A investments, with 174 deals recorded, up from 154 in Q1.
The majority of investment in the crypto sector focused on early-stage deals, including Pre-Seed, Seed, and Series A investments. These accounted for 73% of the total capital invested, with the remaining 27% allocated to later-stage deals.
US Leads the Way in VC Crypto Investments
According to the Galaxy report, US-based companies emerged as the leaders in crypto VC investments, both in terms of deal completion and capital raised. They secured 45% of all investments in Q2 2023. The United Kingdom followed at 7.7%, while Singapore and South Korea claimed 5.7% and 5.4%, respectively.
Meanwhile, valuations in the crypto and blockchain venture landscape experienced a decline during Q2 2023, mirroring the trend seen in the broader venture capital industry. The median pre-money valuation for these deals dropped to $17.93 million, the lowest since Q1 2022. The median deal size was $3 million, based on a $17.93 million pre-money valuation.
As the crypto and blockchain sectors navigate a period of investment decline, industry participants remain watchful for signs of stabilization and renewed growth in the coming quarters.
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