Despite the turbulence in cryptocurrency, venture capitalists are still buying in, Bloomberg reported Wednesday (June 1).
Venture capital has been seeing something of a slowdown according to research from PitchBook, with global investments in crypto startups totaling $9.7 billion. And two-thirds of the way into the second quarter, crypto startups have raised $5.3 billion, which is on track for a small dip.
The report cited Andreessen Horowitz, which broke records by raising $4.5 billion in a fund specifically for crypto, while other startups like Babel Finance and StarkWare got multibillion valuations as well.
And crypto prices have not reflected this activity — the report notes that the price of the biggest coin, Bitcoin, has been hovering around $30,000, half the higher record prices of late 2021.
The report noted that investors might be ignoring the downturn, though some things have been changing for VC-backed startups, with some portfolio companies facing headwinds and investors maybe seeing price reductions.
Among those is Bored Ape Yacht Club, one of the most recognizable NFT collections, which saw its trading volume cut in half.
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Some deals have collapsed and valuations slashed, and startups with a closer proximity to going public being the worst hit.
Crypto has not been much of a media or government darling after the collapse of the UST coin a few weeks ago. PYMNTS quoted Michael Hsu, acting comptroller of the Office of the Comptroller of the Currency (OCC), who said that crypto was “dependent on hype.”
See also: Crypto Economy Is Dependent on ‘Hype,’ Says OCC’s Comptroller
Hsu, a self-described crypto skeptic, said this wasn’t the first time he warned about the risks of investing in crypto.
He said there were vulnerabilities, with crypto being “highly fragmented and prone to hacks,” and that new blockchains were only exacerbating the issue.
