The Rise and Dip in Investment and Financing Transactions in the Encryption Industry

According to reports, according to the latest data from Galaxy Digital, a total of 439 investment and financing transactions occurred in the encryption industry in the first quarter of 2023, an increase of about 20% compared to 366 transactions in the fourth quarter of 2022. Seed stage financing transactions accounted for a relatively high proportion, but the investment and financing scale of the encryption industry in the first quarter was only $2.4 billion, setting the lowest level since the fourth quarter of 2020. In terms of vertical fields, the Web3, NFT, DAO, metaverse, and gaming sub industries received the most financing transactions, while the crypto trading, lending, wallet and other sub industries received higher financing scales. In addition, encryption startups in the United States received the most investment, followed by France.

Data: In Q1 2023, the total financing scale of the encryption industry was 2.4 billion US dollars, with the number of financing transactions increasing by about 20% month on month

In the first quarter of 2023, a total of 439 investment and financing transactions occurred in the encryption industry, according to reports from Galaxy Digital. This number marked a 20% increase compared to the fourth quarter of 2022, which only saw 366 such transactions. Despite this increase, the investment and financing scale of the encryption industry during the first quarter hit a low of $2.4 billion, setting the lowest level since the fourth quarter of 2020.

Seed Stage Financing Holds Up Well

Seed stage financing transactions accounted for a relatively high proportion of the 439 investment and financing transactions. This finding can be interpreted as a positive trend, showing that investors are still showing faith in early-stage projects in the encryption industry. This early-stage investment is crucial as it can ignite innovation and drive growth later on.

Which Vertical Fields Received the Most Financing?

The data shows that web3, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), the metaverse, and the gaming sub-industries received the most financing transactions. Web3 and the metaverse, in particular, have shown tremendous potential in recent years, with NFTs and DAOs also being in the limelight. It is important to note that the crypto trading, lending, wallet and other sub-industries received higher financing scales, indicating a greater demand for financial services within these industries.

The Location of Investment: The United States on Top

The data from Galaxy Digital shows that the United States received the most investment in the encryption industry. France followed the United States in terms of investment. The United States has long been the leader in the global technology industry, and the encryption industry is no exception. Its investment-friendly environment and regulatory clarity provide a fertile ground for encryption startups to flourish.

Conclusion

Despite the decline in investment and financing scales, the encryption industry is still showing resilience and growth. The increase in seed stage financing transactions shows that investors are still willing to bet on early-stage innovation in the encryption industry. The vertical fields that have received the most financing transactions have shown potential in recent years, and the demand for financial services is still high in the sub-industries with larger financing scales. In terms of location, the United States and France are leading the investment in the encryption industry.

FAQs

1. Why did the investment and financing scale of the encryption industry hit a low in the first quarter of 2023?
– There are several possible reasons for this, including increased regulatory scrutiny, market instability, and the normalization of the encryption industry.
2. What is seed stage financing?
– Seed stage financing refers to the initial investment provided to a company or project to help it get off the ground. This type of financing usually comes from angel investors or venture capitalists.
3. Why did web3 and the metaverse receive the most financing transactions?
– Web3 and the metaverse have shown potential in recent years as the internet is expected to evolve into a more decentralized and open ecosystem. Many investors are betting on these verticals to lead the next wave of innovation in the technology industry.