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Despite the prevailing bearish trend in the cryptocurrency market, venture capital firms made several billion-dollar deals in the first quarter of 2023.
Data from the PitchBook Cryptocurrency Report for the first quarter of 2023 showed that crypto companies earned $2.6 billion from 353 investment rounds.
While the level of transactions from companies indicated the viability of the cryptocurrency space, there is still evidence of its weakness.
Report highlights declining number and value of investment deals
According to the report, the first quarter of 2023 had the lowest amount of capital invested in the cryptocurrency space since 2020.
The total number of transactions decreased by 12.2% compared to the previous quarter, and the value of transactions decreased by 11% compared to the previous quarter.
The report highlights that the first quarter of 2023 marks the fourth consecutive quarter of falling investment activity for venture capitalists.
Notably, the number and value of venture capital deals decreased by 64.4% and 78.0%, respectively, compared to the same quarter in 2022.
In addition, the report shows a combination of valuation trends. Seed rounds and late stage rounds were up 33.3% and 209.2%, respectively, compared to the full year 2022. But early-stage rounds are down 16.7% over the same period.
The report also notes that the bearish trend of the cryptocurrency may continue. But at present, this space still has some positive prospects.
For example, Tier 2 scaling solutions performed well, maintaining year-over-year growth.
The data revealed blockchain-based firm Blockstream, which has raised $125 million to fund Bitcoin mining infrastructure.
In addition, another company is well established that develops solutions for scaling the Ethereum virtual machine with zero knowledge. The firm raised $50 million in a late-stage venture round.
General downturn in the cryptocurrency market
The crypto market continues to show red charts as prices for most assets show new losses. Subsequently, the cumulative market capitalization of cryptocurrencies has declined over the last 24 hours. In addition, the total volume of the cryptocurrency market fell by 8.10% in the last 24 hours to $42.75 billion.
In the past few days, the main cryptocurrency asset Bitcoin has been experiencing difficulties. According to CoinMarketCap, the price of bitcoin has been constantly declining over the past week.
The token fell from $29,000 to $26,000. The seven-day price action shows that BTC has fallen over 9%.
At the time of writing, Bitcoin is trading at $26,759 after losing marginally in the past 24 hours. It now has a market capitalization of $511 billion and a market share of 46.30%.
BTC exits the bearish zone l BTCUSDT on Tradingview.com
Altcoins are also seeing a downward trend in prices. Ethereum has dropped 0.21% in the last 24 hours as the price surged to $1,800. Its seven-day active price shows a drop of more than 7.40%.
– Featured image from Pixabay and chart from TradingView.com