September 29, 2023

Investments targeting the crypto industry reached $30.3 billion in the first half of the year, more than in the entire year of 2021 combined, according to Messari’s Fundraising Report for the first half of 2022. It shows that the market downturn in the first six months did not shake investors’ faith in blockchain and crypto technology.

Despite the infamous collapses of a group of CeFi projects in the second quarter, the sector remained strong in attracting investments totaling $10.2 billion, ahead of three other sectors, including infrastructure, DeFi and Web3&NFT.

Ethereum in focus

Per the report conducted by the Dove Metrics fundraising database recently acquired by Messari, the upward trend of betting on crypto projects has shown a steady growth in the 1st half compared to the previous six months. Crypto and traditional funds raised a combined $35.9 billion in the same period, surpassing the full-year volume of $19 billion in 2021.

Across all major sectors, investment is heavily skewed toward early-stage projects, suggesting that investors see crypto as a growing industry with huge potential.

This trend was well reflected in the fact that Ethereum lost its lead in NFTs in the 1st half as other upcoming ecosystems continued to gain funding. Ethereum-based projects earned only $1.1 billion in investments, far below projects based on other networks with $2.9 billion. It is worth noting that Solana-based NFTs have attracted attention lately due to their low network fees. This is particularly evident in the growing popularity of the Magic Eden market, which raised $130 million in June this year.

On the other hand, Ethereum-based DeFi protocols continued to dominate fundraising over the same period, with 56% and 82% of DeFi funding capital going to Ethereum in Q1 and Q2, respectively. The report added that DEX and Asset Management products were the most popular among investors.

CeFi attracted capital despite bankruptcy scandals

Central exchanges raised $3.2 billion in 1H, well ahead of second-placed payments firms which took in $1.58 billion in funding, despite the impact of several high-profile brokerages and lending firms.

As a relatively mature sector, CeFi had half its funding rounds exceed $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 infrastructure funding rounds went to Series A or late-stage Projects, with smart contract platforms receiving the largest share of funding.

In summary, the report said that the deepening of the market crash in May and June did not shake investor confidence in the sector as there were no sharp declines in volume across sectors.

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