Cryptocurrency fundraising reached a three-year low in Q3 2023, according to blockchain intelligence firm Messari’s research report. A total of 297 deals raised just under $2.1B, a 36% decrease from Q2 and the lowest figure since Q4 2020.
Fundraising had peaked at nearly $17.5B across more than 900 deals in Q1 2022, but this was quickly followed by an industry-wide downturn due to the collapse of the Terra ecosystem. Prices of major digital tokens also dipped in Q3 2023, with Bitcoin and Ethereum retreating 8.6% and 10.6%, respectively. The S&P 500, by contrast, fell by 3.8%.
Most of the deals in Q3 were concentrated in the early-stage rounds, with seed funding seeing the highest amount at $488M over 98 rounds. Chain infrastructure projects attracted the largest share of funding at 18%, and DeFi was the most frequently funded sector with 67 deals. Gaming also performed strongly with almost $250M raised.
Binance Labs, the venture capital arm of embattled crypto exchange Binance, was the most active investor during the quarter, with 23 deals mainly focused on DeFi and gaming projects. This comes despite Binance being embroiled in regulatory issues with the U.S. Commodity Futures Trading Commission and the Securities and Exchange Commission, who allege the platform failed to register with U.S. regulators and sold illegal securities.
