Crypto VC growth stalls at 2.4% as market challenges loom

Crypto analysts predict a slow year regarding venture capital investments toward crypto projects, with an estimated increase of a mere 2.4%. The figure expected to reach is $12 billion, 

The general sentiment seems to be a disappointment, even with Wall Street inclining towards cryptocurrencies. This scenario is being attributed to inflation, slightly murky regulations, and dishonorable activities. 

Crypto investments in 2022 dropped by nearly 70% and stood at $9.4 billion in 2003. 

In the opinion of Mike Giampapa, the General Partner at Galaxy Ventures, the venture capital business has had a number of problems for some time now. 

Unfortunately, matters pertaining to the FTX and Terra fiasco, along with the courts entering the scene, are negatively impacting the investors. VCs also depend on the crypto pricing in the way that if prices rise, so do their spirits. 

Though companies like BlackRock managed to dissipate some gloom via the introduction of multiple spot Bitcoin-traded funds, inflationary factors have dampened the mood. Increased inflation results in a curb on money spending on assets such as Bitcoin.

In the meantime, with the Federal Reserve maintaining high interest rates, increasing crypto prices does not seem likely. 

Politicians have also entered the arena regarding crypto, with Donald Trump in favor and Joe Biden not. It then becomes obvious that the election results, too, will have an impact. 

Despite it all, there seems to be a glimmer of expectation and positivity concerning VCs. That presumably speaks well about the crypto sector and its future. To add credence to the fact, the Vice President of Coinbase Ventures, Shan Aggarwal, divulged their optimism towards the crypto space in the upcoming times and are preparing for it.

David Cox

David is a finance graduate and crypto enthusiast. He projects his expertise in subjects like crypto and Blockchain while writing for CryptoNewsZ. Being from Finance background, he efficiently writes Price Analysis. Apart from writing, he actively nurtures hobbies like sports and movies.

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