What’s Driving Venture Capitalists Towards Digital Assets During “Crypto Winter”? 

In the crypto space, the phrase ‘crypto winter‘ is often heard. Some may not know the meaning of this phrase, but they infer a strong negative connotation just from the words themselves.  

However, it refers to an extended period of fiat trading following a crash in the cryptocurrency market. Hence, all of the speculations have risen in recent times after the last crash. 

The majority of investors had remained cautious as they believed the dreaded “crypto winter” had finally reached us. However, it appears no one had informed venture capitalists of the phenomenon as they continued to pour money into companies focused on digital assets.  

Venture capital investments have been in the billions, suggesting that they do not subscribe to the school of thought that the period of prolonged low momentum is now over. 

Crypto companies attract billions of dollars from venture capitalists: 

The year 2022 is less than two months old, but venture capitalists have already started their search for the next big thing, which has resulted in billions of dollars being invested into crypto companies even though the year has just begun. Institutional investors are also increasing their investments in digital asset companies. 

Instead of cowering or shying away from the crypto market following the crash, venture capitalists continue to defy the narrative. Despite the uncertainty over the regulatory framework, the big players are bullish. 

Insider quotes FX strategist James Malcolm as saying that “my specific concern would be more nitty-gritty – that most investors underappreciate regulatory risks, especially those associated with DeFi projects.” 

$2 Billion For Digital Asset Companies: 

Venture capitalists have invested about $2 billion so far in 2022. Some went into smaller companies, but most of them to established brands. One of these happened to be the FTX exchange. Three years after being founded, the crypto exchange has grown rapidly and this year has raised another $400 million at a valuation of $32 billion. 

The crypto company Fireblocks also raised significant funds, valued at $8 billion after raising $550 million. That makes them one of the highest funding recipients of this year. He raised $500 million for investment in digital assets startups through his VC firm, Reddit co-founder Alexis Ohanian. 

Blockdaemon, another crypto company that offers industrial-grade blockchain security, raised $155 million. Through all these rounds of funding in both large and small companies, the total has surpassed $2 billion. 

Over the weekend, the crypto market had made an incredible comeback that saw bitcoin recover over $40,000 once again, adding over $200 billion to its market capitalization. 

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