PitchBook’s Q1 2023 Crypto Report reveals that Binance and Coinbase are the most active firms in terms of cryptocurrency investments.
Binance and Coinbase are the most active firms in terms of investments, according to PitchBook’s Q1 2023 Crypto Report, which is devoted to cryptocurrency investments.
Binance and Coinbase stand out in The Crypto Investment Report
According to the PitchBook study, there were 353 fundraising rounds and $2.6 billion in venture capital raised by cryptocurrency firms globally in the first quarter of 2023.
These figures, while still significant, show an 11% decline in overall deal value and a 12.2% decline in deal volume from the previous quarter.
From this angle, the first quarter of 2023 was actually the weakest since late 2020, or prior to the commencement of the previous significant bull run. Additionally, it is the fourth quarter in a row that the cryptocurrency industry has seen a decline in investment activity.
Despite the fact that the quarter was negative generally, several positive factors might be found in the specifics.
For instance, seed rounds increased by 33.3%, and late-stage rounds increased by up to 209%. The 16.7% reduction in early-stage rounds was the main issue.
Furthermore, the report claims that Binance’s acquisition of a controlling share in Streami’s GOPAX exchange was the most important acquisition, which involved the streaming platform Streami.
The market is still declining
In reality, the Earth/Moon ecology imploded in the second quarter of 2022, which is when the major deterioration started.
In actuality, the all-time high was actually attained in the quarter after the crypto market’s all-time highs, in the first quarter of that year.
The decline has continued ever since, despite being far less severe in the most recent quarter than in the three before.
It should be noted that the level of investment in the crypto market at this time is lower than it was in the first quarter of 2021, when the most recent major bull run was just getting started, but it is still much greater than it was in the fourth quarter of 2020.
As a result, the current level continues to be higher than the pre-bull run level for the time being.
The crypto industry
According to the report, the cryptocurrency sector has expanded quickly over the past ten years, drawing in a sizable user base and institutional investors who have invested billions of dollars.
The usage of secured lending, automated market making, and the tokenization of off-chain assets are all examples of how blockchain technology has advanced much beyond the straightforward recording and transfer of value.
Future innovations in cryptocurrencies could even pose a threat to well-established businesses like Visa, Mastercard, and American Express, who have dominated the market for decades thanks to their capacity to levy fees of up to 3%, claim PitchBook analysts.
According to the paper, there are still major obstacles in the market, and the bankruptcy of multiple cryptocurrency businesses in 2022 is evidence of this. Because of these challenges, widespread adoption is unlikely to occur unless clearer rules and guidelines are published.
The crypto business would have serious concerns about the absence of clear regulation, and this is considered a constraining factor.
One of the most thorough regulatory systems already in place, according to the research, is the EU’s MiCA.
According to PitchBook analysts, 2023 may be a turning point for the sector because they anticipate that from this year, financial authorities and central banks all over the world will focus more on cryptocurrencies.
Additionally, they assert that despite the recent difficulties that have surfaced over the past year, cryptocurrencies and web3 will continue to develop and thrive in the future.
They emphasize how the cryptocurrency ecosystem, particularly decentralized finance (DeFi), has advanced significantly in recent years.
In this regard, they point out that there is still a lot of room for development and innovation because the crypto market is still in its infancy.
Coinbase, Binance, and cryptocurrency investments
Speaking of the future, they anticipate that well-known exchanges like Binance and Coinbase will start making acquisitions in 2023, focusing on smaller rivals like cryptocurrency exchanges, custodial services, or ancillary businesses like financial technology (fintech) securities brokerage.
In other words, if traditional investment firms or funds have historically accounted for a big portion of the important participants in new investment in the crypto industry, it’s feasible that by 2023 it will be the larger crypto companies themselves that take center stage.
The biggest exchange in the world is Binance, and the biggest exchange in the US is Coinbase. As a result of FTX’s failure, the latter of these two titans, which is already listed on the Nasdaq, has only grown stronger.
Investors might concentrate on emerging potential in the cryptocurrency industry such Web3 identity and zero-knowledge proofing.
Intmax and Obol are two businesses to keep an eye on.