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According to Bloomberg, the interest of venture investors in financing new cryptocurrency startups in the second quarter of this year fell to the lowest level in a year.
The consequences of the pandemic and the global economic storm began to affect the financing of cryptocurrency startups. Previously, due to the prevailing investment hype in the industry, crypto startups were less susceptible to economic shocks. However, according to the results of the second quarter, funding for private crypto companies fell to the lowest level for the year.
Robert Le, a financial technology analyst at PitchBook, estimates that $9.85 billion raised to startups from venture capital funds in the first quarter were the result of previous agreements.
“Crypto startups’ immunity to economic shocks was only a consequence of how long it would take to complete venture capital deals. Despite the fact that the cryptocurrency market began to slow down in November and December, these deals were already discussed, so they closed in the first quarter. Now new deals are not being decided,” Le said.
Confirming Le’s observations, David Pakman, managing partner of cryptocurrency venture capital firm CoinFund, told Bloomberg that the collapse of Terra, the serious financial problems of Celsius and Babel Finance, the wave of layoffs at Coinbase and Gemini all contributed to uncertainty and a decrease in the interest of venture investors.
“Deals with startups are falling apart as many investors withdraw their offers in recent weeks. Initial-stage start-up funding fell by about 20 percent, Series A secondary investments by about 50 percent, and Series B and above funding rounds by nearly 70 percent. It’s a long-term downturn in the market, and it won’t end in a month,” Pacman said.
Earlier, two-thirds of major American crypto investors surveyed by Bloomberg MLIV Pulse analysts reported that they were more likely to expect the price of BTC to fall to $ 10,000.
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