Despite Crypto Winter Fundraising In 2022 Overshadows Previous Year’s Record
The wave of the crypto winter in the first half of 2022 was quite devastating. The price drop in almost all the cryptocurrencies brought down the value of the market by more than 50%. The losses were considerably massive that many investors and even miners resorted to selling off holdings to wane off the effect.
However, the crypto industry seems to have laid a formidable foundation that offers robust support. Despite its bearish trend, the sector still recorded an impressive figure in investment.
According to a report from Messari, the crypto industry has recorded increasing investments of about $35.9 billion. Using Dove Metrics, a newly acquired fundraising database, Messari conducted its 2022 Fundraising Report for the first half.
The report shows that this year’s first halt value exceeds the whole-year value of 2021, which was $19 billion. Having such a significant move in just six months shows investors still believe in cryptocurrency and blockchain technology. Their confidence in the industry remained unshaken despite the effect of the crypto winter.
Also, the report observed there had been huge investments from different sectors into several early-stage protocols and other DeFi projects. This shows that participants have come to understand and appreciate the crypto industry’s great potential for growth and development.
A pronounced demonstration is seen as Ethereum lost its lead in NFTs within the year’s first half. Most of the newer ecosystems were also receiving more attention and funding from investors and developers. Among several competitors of the Ethereum blockchain is the Solana network. Hence NFTs based on Solana have more leverage with its low transaction fees.
The investment funds for Ethereum-based projects amounted to $1.1 billion. This value was less than half of the funds totaling $2.9 billion from other projects based on other networks. For example, in June this year, the Solana-based marketplace Magic Eden raised about $130 million.
But decentralized protocols based on the Ethereum blockchain have different funding trends as they dominate in the first half. For Q1 and Q2, Ethereum DeFi funding capital accumulated 56% and 82%, respectively. Also, the report revealed that investors’ popular choices were products of decentralized exchanges and Asset Management.
Crypto Exchanges Depict Commendable Performance
Centralized exchanges have pushed their boundaries with positive performance within the year’s first half. Their progress remained solid despite the chaos in several prominent lending companies and brokerages.
CeFi exchanges amassed up to $3.2 billion within the period to overtake the second-ranked payment firms with $1.58 billion in funding.
The CeFi has over $10 million as half of its funding rounds from January to June. Though its total investment hit $10.2 billion, it dropped by 5.6% from the 2021 second-half’s value.
With Messari’s report, the performance from investments, despite the bearish trend in the H1, is commendable. Moreover, confidence in the industry is still high since most sectors have no drastic drop in volume.
Featured image from Pexels, chart from TradingView.com
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