2022: The year of record cryptocurrency investments?

We shall soon be able, to sum up, the outcomes of the challenging in many aspects year 2022. Was this indeed the most profitable year in cryptocurrency history? What other industries are expected to get the greatest investment in 2022?

Coin Telegraph’s research teams have just released a comprehensive analysis of venture capital investment in 2022. First and foremost, the annual figure is as follows: 36.1 billion dollars generated by these funds in 2022. This is over $6 billion more than the $30.3 billion raised by crypto ventures last year.

The main disadvantage is that these investments are just temporary. Indeed, as shown in the graph below, after peaking in April, the numbers have continued to fall until now. This trend must be tied to the year’s distressing episodes, such as the collapse of Terra (LUNA) and the subsequent bankruptcies, particularly Celsius, Voyager, and BlockFi.

Comparison to 2021

In 2021, there was a surge in venture capital investment in cryptocurrencies. According to Galaxy Digital data, venture capitalists invested $33 billion in crypto and blockchain startups in 2021, accounting for around 5% of total investments for the year. This implies a 1,000% increase over 2020! What a timeline to live in.

Regardless of the bearish trend that seized the cryptocurrency market in early 2022, venture capital investments have not halted. According to Galaxy Digital, venture capital investment surpassed $10 billion in the first quarter of 2022, setting a new high. This was in stark contrast to the previous bear market in 2018 when many cryptocurrency firms struggled to raise money and remain viable.

Looking back to the conclusion of the year, namely November, when $840.4 million was invested vs $843 million in October. The 4.8% drop is not enormous, but it reflects the decreasing trend that has been in place since the spring. However, in addition to the numbers, it is worthwhile to consider the funds’ objectives and investing strategies.

The following figure depicts the allocation of capital among the five sectors that comprise cryptocurrency in general. Infrastructure has the most money ($483.9 million), followed by Web3, DeFi, CeFi, and NFT. We can still see that web3 wins the vote in terms of the number of contracts with 23 or 37.7% of the total.

Trends to look out for in 2022–2023

As geopolitical and economical uncertainty persists, European venture capitalists are predicted to be even more ambitious in their investment decisions in Q4 2022–2023. This approach will have the largest impact on early-stage firms, which may impede deal-making in the long term.

As they relate to alternative energy and energy storage technologies, energy and ESG are predicted to be prominent investment sectors in Europe in Q4 2022–2023. The B2B sector is projected to continue appealing to investors, particularly as companies in this area strive to improve their efficiency and profitability.