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Web3 Investments Expected to Grow in 2023: VC Funding Update

• In 2022, venture capital firms invested over $30 billion in investments in blockchain and cryptocurrency firms.
• 31% of deals in 2022 were in the web 3 sector, which includes non-fungible tokens (NFTs), decentralized autonomous organizations, the metaverse, and online gaming.
• Alex Thorn, head of research at crypto investment firm Galaxy Digital, anticipates that the trend of VC funding for web3 businesses may continue in 2023.

Galaxy Digital, a crypto investment firm, revealed in an interview with the CEO on Monday that in 2022 venture capital firms invested over $30 billion in investments in blockchain and cryptocurrency firms. This figure represents a significant increase from the prior year, showing the growing interest in this sector of the economy. Of the deals made in 2022, 31% of them were in the web 3 sector which includes non-fungible tokens (NFTs), decentralized autonomous organizations, the metaverse, and online gaming. In comparison, 13% of the deals were in trading platforms.

The firm also noted that with the downturn in the crypto markets, the number of deals and the amount of money invested decreased every quarter of 2022. However, there was still an increase in funding for later-stage businesses, particularly those that offer trading and exchange services. Alex Thorn, head of research at Galaxy Digital, anticipates that this trend of VC funding for web3 businesses may continue in 2023.

In addition, Fred Wilson, a tech investor and co-founder of Union Square Ventures, discussed the potential macroeconomic picture for 2023 in a blog post from Jan.1 and the need for prospective web3 investors to exercise some restraint. He also noted that the U.S. is still in the leading position when it comes to crypto VC deals, but that politicians need to create policies that won’t discourage innovation.

Overall, the outlook for VC funding for web3 businesses in 2023 looks positive. The increased interest in blockchain and cryptocurrency firms and the opportunities in the web3 sector are encouraging signs for further investment in the industry. It will be interesting to see what the future holds for the industry and how the macroeconomic picture will play out.