Despite the bear market…investments targeting the cryptocurrency industry in 2022 outperform 2021
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Answer Despite the bear market…investments targeting the cryptocurrency industry in 2022 outperform 2021
Investments targeting the cryptocurrency industry reached $30.3 billion in the first half of this year, more than all of 2021, according to a Messari report.
Accordingly, it appears that the market decline in the first six months of 2022 did not shake the confidence of investors in the technology of blockchain and crypto.
Despite the infamous collapse of a handful of lending projects in the second quarter, the sector remained strong in attracting investments totaling $10.2 billion, ahead of three other areas, including DeFi infrastructure, Web3 and NFT.
Ethereum under the microscope:
According to report Messari, the upward trend of betting on crypto projects showed a steady growth compared to the previous six months.Read:Nearly $400 Million Liquidated After BTC Price Drops Below $20,000
Crypto funds raised a total of $35.9 billion in the same period, surpassing the $19 billion in all of 2021 in 2021.
Across major sectors, investments are heavily skewed towards early stage projects, indicating that investors are looking at cryptocurrencies as a thriving industry with huge potential ahead.
This trend was well reflected in Ethereum’s loss of leadership in the NFT space in the first half of 2022 as other upcoming ecosystems continued to win funding.
Ethereum-based projects only earned $1.1 billion through investments, far less than other network-based projects combined at $2.9 billion.
It should be noted that NFT based on Solana has recently attracted attention due to low network fees.
This is particularly evident in the growing popularity of the trading platform Magic Eden, 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 and Asset Management products were the most popular among investors.Read:Twitter CEO Explains Where Proceeds From Selling His First NFT Tweet Will Go
Lending and trading platforms attract more funding despite bankruptcy scandals:
Central trading platforms attracted $3.2 billion in the first half, well ahead of the second-largest payment firms with $1.58 billion in funding, despite the fallout from several brokerages and lenders.Read:One of the largest crypto companies in Brazil is collaborating with Stellar to create and develop a CBDC
As a relatively mature sector, central trading platform CeFi received half of its funding rounds above $10 million from January to June, with total investment reaching $10.2 billion, down 5.6% from the second half of 2021.
Also, 40% of funding rounds were directed to infrastructure or late-stage projects, with smart contract platforms receiving 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 decrease in investor appetite towards the crypto market was observed.
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