VCs Pour $14.2 Billion Into Crypto In H1 2022, But Investments Are Slowing Now

Venture capital firms invested $14.2 billion in crypto across 725 deals in the first half of 2022, but big four accounting firms KPMG have resulted in investments likely to decline for the rest of the year.

According to a newly published KPMG report on September 6, the largest investments in the first half of 2022 came from Germany-based crypto trading platform Trade Republic ($1.1 billion), digital asset custody platform Fireblocks ($550 million), crypto exchange FTX ($500 million) and Ethereum software company ConsenSys ($450 million).

The report’s authors, including KPMG’s global fintech leader Anton Ruddenklau, noted that investment figures for the first half of 2022 alone had already more than doubled in all years before 2021, which “highlights the increasing maturity of space and scope of technologies and solutions attracting investments.

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However, Ruddenklau said overinvestment during the record period of 2021 and the first half of 2022, along with an imminent potential cut, rising inflation, interest rates and the Russian-Ukrainian conflict would lead to lower investment this year.

Total global investment activity (VC, PE and M&A) in blockchain and cryptocurrency. Source: KPMG.

KPMG’s prediction of a slowdown in crypto investment already appears to be borne out by July data, with monthly inflows into the blockchain venture capital market down 43% during the month, according to Cointelegraph Research.

Ruddenklau expects the slowdown in crypto interest and investment to be particularly felt in retail businesses offering coins, tokens, and NFTs.

Alexandre Stachchenko, Director of Blockchain & Crypto Assets at KPMG France, said in the report that “well-run crypto companies with sound risk management policies, a long-term view and a solid approach to managing costs and risks” will position themselves best to survive the current. bear market.

“Of course, some cryptos will die out, especially those that don’t have clear and solid value propositions. This could actually be quite healthy from an ecosystem perspective, as it will remove some of the mess created in the euphoria of a bull market. The best companies will be those that survive.

Stachchenko added that financial institutions are increasingly interested in blockchain infrastructure solutions and stablecoins to capitalize on the operational benefits of distributed ledger technology.

Lie: Venture Capital Funding: A Beginner’s Guide to Venture Capital Funding in the Crypto Space

KPMG also expects new investment efforts in underdeveloped fintech markets, particularly in Africa.

Efforts on this front have been made by crypto exchange Binance, which recently accelerated preliminary talks with the Nigerian government to build a crypto-friendly economic zone in the but to generate long-term economic growth through the digital innovation.

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VCs Pour $14.2 Billion Into Crypto In H1 2022, But Investments Are Slowing Now


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