Venture Capital Report: 2022 Q1 Overview

April 2022 - Cointelegraph Research

Public Access
Keywords :
VC, Venture Capital, Deals, M&A, Funding, 2022

The beginning of 2022 had swings to the downside of the fiat valuation of Bitcoin and other cryptocurrencies. These downward corrections did not deter the venture capital (VC) space in the slightest. January saw a dramatic decrease in the USD price of BTC but also brought with it over $5 billion in capital inflows into the blockchain and crypto industry. Regardless of the short-term price fluctuations, the overall industry is growing rapidly.

The entire first quarter of 2022 saw capital investments of $14.6 billion. To put that in perspective, the VC capital investment in all of 2021 was around $30.5 billion. This entire industry is poised to explode, and yet, the entire industry is still in the early adoption phase.

If the current trajectory of VC investment in the blockchain industry continues, we could see capital inflows into all sectors of this space at least double that from last year. A global housing crash, regulatory changes, or other unforeseen circumstances could change the trajectory of this comounded growth rate. Even given these potential black swan events, the industry's long-term growth seems to be unstoppable. Negative macroeconomic conditions such as a recession could only strengthen the need for the DeFi sector even more.

Changing macro circumstances could sway VC attention from one sector to another or slow down the pace of investment. DeFi and Web3 are the top sectors of interest in 2022 Q1. Interestingly, there was a shift away from Infrastructure to the NFT space as the second priority sector for VCs. There is insufficient data to suggest this is a long-term trend, but these moves should be noted.

One thing for sure is that the interest continues to grow in this space. Institutions like Bain Capital just started a $560 million fund focused on building the next phase of Web3. Sequoia Capital also heavily joined this space with a crypto fund of over half a billion dollars. Katie Haun broke away from Andreesen Horowitz (a16z) to form Haun Ventures, raising $1.5 billion to focus on Web3. Cointelegraph Research will be there to analyze and provide insights into this ever-changing and dynamic crypto-landscape.