{"id":343300,"date":"2023-07-18T16:55:58","date_gmt":"2023-07-18T15:55:58","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=343300"},"modified":"2023-07-18T17:20:44","modified_gmt":"2023-07-18T16:20:44","slug":"web3-projects-see-78-drop-in-vc-investments-as-crypto-funding-falls","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/web3-projects-see-78-drop-in-vc-investments-as-crypto-funding-falls\/","title":{"rendered":"Web3 projects see 78% drop in VC investments as crypto funding falls"},"content":{"rendered":"<p>Web3 projects raised $3.6 billion from venture capital firms during the first six months of this year, representing a 78% drop from what they raised from these organizations during the same period last year, Crunchbase <a href=\"https:\/\/news.crunchbase.com\/web3\/crypto-blockchain-startup-vc-funding-falling-data\/\">reported<\/a> on July 18.<\/p>\n<p>According to the report, web3 projects' deal flow hit the slowest pace since the final quarter of 2020, when 291 deals got $1.1 billion.<\/p>\n<figure id=\"attachment_343313\" aria-describedby=\"caption-attachment-343313\" style=\"width: 922px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-343313\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/07\/Screenshot-2023-07-18-150025.jpg\" alt=\"VC funding for web3\" width=\"922\" height=\"543\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/07\/Screenshot-2023-07-18-150025.jpg 922w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/07\/Screenshot-2023-07-18-150025-300x177.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/07\/Screenshot-2023-07-18-150025-768x452.jpg 768w\" sizes=\"(max-width: 922px) 100vw, 922px\" \/><figcaption id=\"caption-attachment-343313\" class=\"wp-caption-text\">Source: Crunchbase<\/figcaption><\/figure>\n<p>Crunchbase defined web3 as cryptocurrency and blockchain startups.<\/p>\n<h2>Crypto investments declining<\/h2>\n<p>A closer look at the number showed that web3 projects raised $1.8 billion during this year's first two quarters. Venture capital funding for web3 projects notably crashed by 76% during this second quarter compared to what was raised during the same period last year.<\/p>\n<p>Meanwhile, a separate research <a href=\"https:\/\/www.galaxy.com\/research\/insights\/crypto-venture-capital-q2-2023\/\">report<\/a> from Galaxy Research corroborates Crunchbase's findings. According to Galaxy, crypto and blockchain projects raised $2.32 billion during the second quarter\u2014the lowest amount since the fourth quarter of 2020. The firm noted that the downward trend had begun in the first quarter of last year when investments peaked at $13 billion.<\/p>\n<figure id=\"attachment_343319\" aria-describedby=\"caption-attachment-343319\" style=\"width: 1009px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-343319\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/07\/Screenshot-2023-07-18-151353.jpg\" alt=\"VC funding for crypto\" width=\"1009\" height=\"523\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/07\/Screenshot-2023-07-18-151353.jpg 1009w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/07\/Screenshot-2023-07-18-151353-300x156.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/07\/Screenshot-2023-07-18-151353-768x398.jpg 768w\" sizes=\"(max-width: 1009px) 100vw, 1009px\" \/><figcaption id=\"caption-attachment-343319\" class=\"wp-caption-text\">Source: Galaxy Research<\/figcaption><\/figure>\n<blockquote><p>&#8220;Crypto and blockchain startups raised less money across the last three quarters combined than they did in just Q2 of last year.&#8221;<\/p><\/blockquote>\n<p>Will Clemente, the co-founder of Reflexivity Research, <a href=\"https:\/\/twitter.com\/WClementeIII\/status\/1679949297415077892?s=20\">pointed out<\/a> that VC funding for crypto in June was lower than any month during the absolute depths of the 2018 bear market.<\/p>\n<p>The Head of Firmwide Research, Alex Thorn, <a href=\"https:\/\/twitter.com\/intangiblecoins\/status\/1679939363835084806?s=20\">explained<\/a> that investors struggled to raise new funds, adding that founders were getting lower project valuations.<\/p>\n<h2>Why is crypto VC funding crashing?<\/h2>\n<p>Crunchbase noted that the declining funds were coming when the industry witnessed a renewed level of institutional interest.<\/p>\n<p>In June, BlackRock led a wave of institutional Bitcoin spot ETF <a href=\"https:\/\/cryptoslate.com\/blackrock-bitcoin-etf-filing-triggers-wave-of-institutional-interest\/\">applications<\/a> with the Securities and Exchange Commission (SEC), resulting in the value of several digital assets, including Bitcoin (<a href=\"https:\/\/cryptoslate.com\/coins\/bitcoin\/\">BTC<\/a>) and Ethereum (<a href=\"https:\/\/cryptoslate.com\/coins\/ethereum\/\">ETH<\/a>), <a href=\"https:\/\/cryptoslate.com\/crypto-markets-are-booming-after-historic-xrp-ruling-btc-and-eth-both-break-critical-barriers-at-31k-and-2k\/\">rising<\/a> to their yearly highs.<\/p>\n<p>However, the institutional interest was coming on the heels of <a href=\"https:\/\/cryptoslate.com\/us-doj-ramps-up-crypto-scrutiny-targets-crypto-exchanges-defi-hackers\/\">heightened regulatory scrutiny<\/a> of the space across multiple jurisdictions following last year's record market crash.<\/p>\n<p>For context, the U.S. SEC filed <a href=\"https:\/\/cryptoslate.com\/coinbase-moves-to-dismiss-sec-charges-describes-it-as-an-extraordinary-abuse-of-process\/\">lawsuits<\/a> against leading crypto exchanges, Coinbase and Binance, alleging that their operations violated federal securities law. The financial watchdog's regulation-by-enforcement approach has further led several crypto-related firms to <a href=\"https:\/\/cryptoslate.com\/crypto-community-questions-sec-probe-into-defi-protocol-barnbridge\/\">shutter operations<\/a> in the country.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Web3 projects raised $3.6 billion from venture capital firms during the first six months of this year, representing a 78% drop from what they raised from these organizations during the same period last year, Crunchbase reported on July 18. According to the report, web3 projects&#8217; deal flow hit the slowest pace since the final quarter [&hellip;]<\/p>\n","protected":false},"author":720,"featured_media":343311,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35372],"tags":[77743,78455],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Web3 projects see 78% drop in VC investments as crypto funding falls<\/title>\n<meta name=\"description\" content=\"Crypto funding crashed to the lowest point since the fourth quarter of 2020 during this years second quarter.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/web3-projects-see-78-drop-in-vc-investments-as-crypto-funding-falls\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Web3 projects see 78% drop in VC investments as crypto funding falls\" \/>\n<meta property=\"og:description\" content=\"Crypto funding crashed to the lowest point since the fourth quarter of 2020 during this years second quarter.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/web3-projects-see-78-drop-in-vc-investments-as-crypto-funding-falls\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2023-07-18T15:55:58+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-18T16:20:44+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/07\/vc-fund-bitcoin.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Oluwapelumi Adejumo\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Oluwapelumi Adejumo\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/web3-projects-see-78-drop-in-vc-investments-as-crypto-funding-falls\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/web3-projects-see-78-drop-in-vc-investments-as-crypto-funding-falls\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/oluwapelumi-adejumo\/#person\",\"name\":\"Oluwapelumi Adejumo\",\"url\":\"https:\/\/cryptoslate.com\/author\/oluwapelumi-adejumo\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/oluwapelumi-adejumo\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/oluwapelumi-adejumo\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/12\/profile-photo-oluwapelumi-adejumo-300x300.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/12\/profile-photo-oluwapelumi-adejumo-300x300.jpg\",\"caption\":\"Oluwapelumi Adejumo\"},\"jobTitle\":\"Senior Reporter\",\"description\":\"Oluwapelumi values Bitcoin's potential. 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