What Keeps Crypto Venture Capitalists Motivated Amidst Crypto Crash?

While a valuation reset is going on currently, for investors it’s the best time to buy various assets as great opportunities arise for them at extremely reasonable prices. Crypto-native funders especially, view the crisis as a bump on the road in the long run and are investing heavily right now. Thus, in actuality, venture capitalists in the crypto sector benefit a lot from the steep crypto crash.

What Funds are Being Raised and Where is it Going?

The capital is mostly funneled into the blockchain infrastructure industry, followed by DeFi, NFTs, and other Web3 sub-sectors. Massive funding projects have been announced this month, including a $367 million fund by Boldstart Ventures which is devoted to crypto infrastructure, a $500 million investment fund closed by Binance Labs to increase Web3, and blockchain adoption, and a whopping $600 million fund raised by Felix Capital for crypto investment.

Comparison and Contrast

Over the years, the trend line for venture capitalists in the crypto sector has become very positive, and 2022 can even be called the peak. The multiple mega-funds being launched into the digital asset world recently will grow the sector in numerous ways. Venture capitalists have remained keenly interested in crypto despite the downturn in the economic cycle as the sector will note its volatility. Past experiences have shown that their risky investments during market fluctuations usually pay off handsomely over time. A great example of this is Andreessen Horowitz, otherwise known as A16Z. The company took advantage of the last crypto market crisis by employing a $300 million fund amidst it. This risk paid off in a short period, and once the market stabilized they reaped the benefits of their strategic and timely decision. A16Z took the same path again, deploying a fund nearly 15 times the amount they invested in the last market downturn, and many venture capitalists have followed suit.

What Role Do Venture Capitalists Play in the Future of Crypto?

A vital component of any successful industry is its capital and funding. Projects and entrepreneurs in the crypto sector have thrived over the years as capital being allocated into the space has increased significantly. As the market continues to grow, and financial and institutional investors take more notice of the digital asset world, more capital will flow in, in turn improving the quality of the ecosystem. The robust amount of activity with venture capitalists and crypto reaffirms the confidence in the sector. Any investing in and building of companies when done in a bearish market can potentially thrive in the long run. The most timely decisions amidst volatility result in lucrative positions when the market shifts again.