October 3, 2022

Investments targeting the cryptocurrency industry reached $30.3 billion in the first half of the year, more than the entire year combined in 2021, according to the H1 2022 fundraising report Misari. It appears that the market downturn in the first six months has not shaken investor confidence in blockchain technology and crypto.

Despite the infamous failures of a handful of CeFi projects in the second quarter, the sector remained strong in attracting investments totaling $10.2 billion, ahead of three other areas, including infrastructure, DeFi, and Web3 & NFT.

Ethereum under the microscope

for every Report With the newly acquired Dove Metrics fundraising database from Messari, the upward trend of betting on crypto projects has shown steady growth in H1 compared to the previous six months. Crypto and traditional funds raised a total of $35.9 billion in the same period, exceeding the full-year volume of $19 billion in 2021.

Across key sectors, investments are heavily skewed towards early stage projects, indicating that investors are looking at cryptocurrency as a thriving industry with huge potential.

This trend was well reflected in Ethereum losing leadership in NFTs in H1 as upcoming ecosystems continued to win funding. Projects based on Ethereum only earned $1.1 billion through investments, far less than projects based on other networks combined at $2.9 billion. It’s worth noting that Solana-based NFTs have been gaining attention recently due to low network fees. This is especially evident in the growing popularity of Magic Eden Market, which raised $130 million in June of this year.

On the other hand, Ethereum-based DeFi protocols continued to dominate fundraising in the same period, with 56% and 82% of DeFi funding capital going to Ethereum in the first and second quarters, respectively. The report added that DEX’s and Asset Management products were the most popular among investors.

CeFi Attracted Capital Despite Bankruptcy Scandals

Central exchanges attracted $3.2 billion in the first half, far ahead of second-ranked payment firms with $1.58 billion in funding, despite the fallout from several high-profile brokerages and lenders.

As a relatively mature sector, CeFi received half of its funding rounds above $10 million from January to June, totaling $10.2 billion, down 5.6% from the second half of 2021. Also, 40% of infrastructure funding rounds were directed to Series. A or late stage projects, where smart contract platforms get the largest share of the funding.

In summary, the report indicated that the worsening market crash in May and June did not dampen investor confidence in the industry as no sharp volume declines were observed in various sectors.

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