In 2023, the crypto firms raised around $6.25 billion in funding. The funds raised by crypto firms have drastically declined compared to 2022’s approximate raise of $22 billion.
Indeed, the market recovered in 2023, with Bitcoin rallying more than 150%. However, the crypto market was greatly impacted by last year’s collapse of big firms such as Terraform Labs, FTX, and others.
Hence, the Venture Capitalist (VC) interest in the crypto industry declined in 2023. Meanwhile, Artificial Intelligence (AI) was the talk of the town.
Did AI Hype Cause Crypto Fundings to Decline by Over 70% in 2023?
The screenshot below from DefiLlama shows that the crypto funding drastically declined in 2023 . Last year, the crypto companies raised around $22 billion, with the highest funding of $3.677 billion in March 2022.
However, in 2023, the total funds raised are approximately $6.25 billion. That’s a whopping decline of over 70% compared to 2022. February 2023 recorded the highest funding of around $877 million.
Due to the decline in funding, various firms were at risk of shutting down this year. In fact, many firms had to stop their operations or resort to layoffs due to the lack of funding.
Read more: How To Fund Innovation: A Guide to Web3 Grants
Meanwhile, Artificial Intelligence companies received significant funding in 2023. This is because the advent of AI chatbots such as ChatGPT and Bard attracted investors’ interest.
The screenshot below shows that as of Q3 2023, AI firms raised approximately $33 billion this year.
Read more: AI Stocks: Best Artificial Intelligence Companies To Know in 2023
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