Last Year's Cryptocurrency Startup Investment Plummeted... "A Reversal Expected This Year"

Venture Capital (VC) Investment $9.5 Billion
Less Than One-Third of the Amount Two Years Ago

On the 11th, as the U.S. Securities and Exchange Commission (SEC) approved the listing of a Bitcoin spot exchange-traded fund (ETF), Bitcoin prices rose and were displayed on the electronic board at the Bithumb Customer Support Center in Gangnam-gu, Seoul. Photo by Jinhyung Kang aymsdream@

Bloomberg reported on the 11th (local time) that investment in cryptocurrency startups sharply declined last year. However, with the U.S. Securities and Exchange Commission (SEC) approving the Bitcoin spot exchange-traded fund (ETF) the day before, the industry is optimistic about this year's outlook.

According to research firm PitchBook, venture capital (VC) investment in the cryptocurrency industry last year was $9.5 billion. This is less than a third of the amount from the year before last. In particular, the fourth quarter of last year remained at $1.8 billion, half the amount of the same period the previous year.

During this period, Sam Bankman-Fried, founder of the cryptocurrency exchange FTX, was found guilty of fraud and other charges, and Zhao Changpeng, founder of the world's largest cryptocurrency exchange Binance, was fined heavily in the U.S. for violations including money laundering. PitchBook emphasized that "there will no longer be valuations of $20 million in the early venture stages."

The non-fungible token (NFT) industry, which also utilizes blockchain technology like cryptocurrencies, suffered a major blow. According to NFT data provider CryptoSlam, the total value of NFT assets dropped 63% last year to just $8.7 billion.

With the approval of the Bitcoin spot ETF in the U.S. on the 10th, the industry is optimistic about the outlook. Additionally, the anticipated listing of stablecoin issuer Circle Internet Financial is also seen as a positive factor. PitchBook forecasts that "fundraising for cryptocurrency ventures will recover in the first quarter of this year."