Galaxy Digital's Head of Research Sees More Venture Funding for Web3 Firms This Year

Web3 blockchain startups and trading-based services led venture-capital deals and funding in 2022, and the trend could continue this year, according to Alex Thorn, head of research at crypto investment firm Galaxy Digital.

Thorn told CoinDesk TV’s “First Mover” on Monday that the Web 3 sector, which is made up of non-fungible tokens (NFTs), decentralized autonomous organizations, the metaverse and online gaming, were 31% of deals in 2022, while 13% were made up of trading platforms.

VCs invested more than $30 billion into crypto and blockchain startups in 2022, according to Galaxy's “Crypto VC Year End” report.

Thorn noted, however, that the number of deals and amount of money invested steadily declined every quarter during 2022, pointing out that macroeconomic factors coupled with the fall of significant crypto companies may have played a role in the decrease.

Crypto VC fundraising and fund count, Galaxy Digital

The firm found that more money is being invested in later-stage companies, especially those that provide trading and exchange services, he said.

“That makes some sense,” Thorn said, because “there are more later-stage companies than there were years ago.”

Thorn also said the U.S. “remains in the leading position” when it comes to crypto VC deals but said policymakers must establish regulations that don't stifle crypto innovation.

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