Blockchain and Cryptocurrency Struggling to Raise Funds: Has AI Taken Over?

On April 17th, Evan Cheng, founder of Sui’s development team Mysten Labs, stated in an interview that with blockchain and cryptocurrency startups struggling to raise funds after the FTX crash, artificial intelligence has now gained a larger share of venture capital funding. Despite numerous difficulties, Cheng believes that this situation provides an opportunity for developers to create an open and transparent infrastructure. Venture capital firms are still willing to provide early financial support for crypto companies, but valuations have been affected. However, once startups reach the later stages of Series A and Series B, it is difficult to obtain growth capital, and only excellent companies can receive support. （Forkast）

Founder of Mysten Labs: AI has taken over the venture capital share in the encryption field

As blockchain and cryptocurrency startups struggle to raise funds after the FTX crash, artificial intelligence has now gained a larger share of venture capital funding. However, amidst numerous difficulties, Founder of Sui’s development team Mysten Labs, Evan Cheng, believes that this situation provides an opportunity for developers to create an open and transparent infrastructure. In this article, we explore the effects of the FTX crash on the blockchain and cryptocurrency industry and the rising prominence of artificial intelligence in the world of venture capital funding.

Introduction

Over the past few years, blockchain and cryptocurrency startups have attracted millions of dollars in investments, and the industry has seen several companies achieve success. However, the FTX crash has made it difficult for startups to raise funds from venture capitalists, causing many of them to struggle. On the other hand, the rising prominence of artificial intelligence has brought about a paradigm shift in venture capital funding.

The Impact of the FTX Crash

The FTX crash has affected the crypto industry massively, with many blockchain and cryptocurrency startups finding it difficult to raise funds. Venture capitalists are still willing to provide financial support to crypto companies, but valuations have been affected. Despite this, Cheng remains optimistic, stating that the situation provides an opportunity for developers to create a more open and transparent infrastructure.

Artificial Intelligence Takes Over

As blockchain and cryptocurrency startups struggle to raise funds, artificial intelligence has become a more attractive sector for venture capitalists. Cheng believes that artificial intelligence has gained a larger share of venture capital funding due to its potential to revolutionize several industries. Startups are turning to AI to improve their products and services, making the sector more promising for investors.

The Difficulty in Obtaining Growth Capital

Despite the willingness of venture capitalists to provide early-stage funding for crypto companies, it is difficult for startups to obtain growth capital. Only excellent companies can receive support in the later stages of Series A and Series B. This has forced startups to rethink their strategies and adopt new approaches to raising funds.

Conclusion

While the FTX crash has made it difficult for blockchain and cryptocurrency startups to raise funds, the rising prominence of artificial intelligence has provided an opportunity for them to pivot and adopt new strategies. As venture capital funding shifts to AI, startups must embrace this new paradigm and innovate to stay ahead. Only time will tell whether the blockchain and cryptocurrency industry will rebound, but for now, AI seems to be the future of venture capital funding.

FAQs

#1. What was the cause of the FTX crash?

The FTX crash was caused by a sudden drop in the price of cryptocurrencies, which led to a significant loss of value for blockchain and cryptocurrency startups.

#2. How can startups raise funds in the later stages of Series A and Series B?

Startups in the later stages of Series A and Series B can raise funds by demonstrating excellent performance and by adopting new strategies to make their products and services more attractive to investors.

#3. Will blockchain and cryptocurrency startups rebound?

It is difficult to predict whether blockchain and cryptocurrency startups will rebound as the industry is facing significant challenges. However, the rising prominence of artificial intelligence provides an opportunity for startups to pivot and innovate to stay ahead.