Bloomberg: Funding for crypto startups has fallen to an annual low

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According to Bloomberg, the interest of venture capitalists in financing new cryptocurrency startups in the second quarter of this year fell to the lowest level in a year.

Consequences of the pandemic and globalThe economic storm began to affect the financing of cryptocurrency startups. Previously, due to the investment rush prevailing in the industry, crypto startups were less susceptible to economic shocks. However, at the end of the second quarter, funding for private crypto companies fell to the lowest level in a year.

Financial technology analyst at a companyPitchBook Robert Le believes that the $9.85 billion raised by venture capital funds in the first quarter was the result of previous agreements.

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“The immunity of crypto startups toeconomic turmoil was simply a consequence of how long it would take to complete venture capital deals. Even though the cryptocurrency market began to slow down in November and December, these deals were already mooted, which is why they closed in Q1. Now they are hesitant to conclude new deals,” Le said.

Confirming Le's observations, managing partnerCrypto venture capital firm CoinFund David Pakman told Bloomberg that the collapse of Terra, serious financial problems at Celsius and Babel Finance, and a wave of layoffs at Coinbase and Gemini all contributed to uncertainty and decreased interest among venture capital investors.

“Startup deals are falling apart,as many investors have been withdrawing their offers in recent weeks. Seed-stage funding is down about 20%, Series A secondaries are down about 50%, and Series B and above are down nearly 70%. This is a long-term downturn in the market and it will not end in a month,” Packman said.

Previously, two-thirds of large 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.