Despite the ongoing tumultuous market conditions, venture capital investments in European crypto startups hit an all-time high of $5.7 billion in 2022.
2022 was a turbulent year for the crypto space, from an ongoing bear market and high-profile collapses of some of the industry’s most prominent players, like Terra and FTX. Despite the setbacks, venture capital (VC) investors continued to show support for crypto startups.
According to a new study released by European investment firm RockawayX, VC investment in crypto startups based in Europe reached its all-time high in 2022, with $5.7 billion invested
European decentralized finance (DeFi) startups hit $1.2 billion in 2022 — a 120% increase from the previous year’s investments of $534 million.
Viktor Fischer, the CEO of RockawayX, pointed out that the crypto market is cyclical. During the 2018 winter, “the total digital asset market cap fell by 80%, but startup funding activity held steady.”
“Investments made when digital asset prices were depressed materialized in tech and usage traction alongside ‘bull market’ price recoveries.”
Europe is also home to the highest number of crypto startups (3,977), according to the headquarters location.
However, it falls behind the United States in the number of startups with over a million dollars of funding and companies with a value of over $1 billion, knowns as unicorns.
Top global investors in European startups include Animoca Brands, Coinbase, Blockchain Capital and the Digital Currency Group.
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In Europe, investment in startups which provide financial services made up more than half (52%) of all investments, with infrastructure and Web3 making up 32% and 16% respectively.
However, when compared with the year prior investment in financial service-based startups declined by 19% and infrastructure grew by 24%.
Europe’s growing prominence as a crypto-friendly region comes as regulators in the European Union finalize their highly-awaited MiCA regulations.
The final result of the regulations have been postponed two times by the EU, both times due to translation issues. Regulations passed in the EU must be translated into all 24 languages of the member states.
At the time of writing, the release of the MiCA rules are anticipated to be released in April 2023.
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