Crypto startups are facing a harrowing time attracting private financiers after the collapse of digital-asset exchange FTX. Venture capital investment in the industry plunged to its lowest level in almost two years during the fourth quarter of 2022, according to data from research firm PitchBook.
Overall, VC firms invested $2.3 billion in crypto startups during the quarter, a 75% drop from the same period the previous year, according to PitchBook. Venture capitalists had already begun slowing their investment activity, but the implosion of FTX in November prompted them to pull back even further, said Robert Le, a crypto analyst at the research firm.
"Investors are trying to see what’s going to happen next and there isn’t a rush to deploy capital,” Le said in an interview.