The weakening interest of venture capitalists in the blockchain industry may lead to a prolonged correction of the cryptocurrency market. With such a forecast was made by the bank JPMorgan.
And he notes that the decline in capital investment in the development of services on the blockchain has been observed since 2022, that is, since the moment when the cryptosphere came “crypto winter”.
The industry environment improved in 2024 due to the rise of bitcoin (BTC). However, capital inflows into the blockchain sector are still far behind the volumes recorded in 2021.
Since January 2024, venture capitalists have channeled $3.2 billion into the crypto sector, compared to more than $4 billion in the first quarter of 2022, JPMorgan said, citing data from Block Research. Galaxy Digital, Hack VC and Hivemind Capital stand out among the top investors.
By contrast, hedge funds focused on the digital asset market have seen strong growth in 2024.
Since January, the amount of capital under their management has increased to about $20 billion, the bank’s report noted.