By Nathan Ferguson
The last year saw huge turbulence in the crypto space. Throughout 2022, the bear market as well as the high-profile collapses of a few well-known crypto players such as FTX and Terra have played a significant role in all this.
Notwithstanding the setback, the parties investing in venture capital have remained determined and have frequently been supporting crypto startups.
European DeFi Ventures Beheld 120% Spike in VC Investments during Last Year
As per an exclusive study conducted by RockawayX (a European investment company), venture-capital investment in startups within the crypto sector of Europe touched an all-time high back in the last year.
At that time, the cumulative invested amount equaled nearly $5.7 billion. The decentralized finance (DeFi) ventures in the European market reached the $1.2B mark in the previous year.
This figure indicated an approximate increase of up to 120% as compared with the $534M worth of investments seen in the year before. RockawayX’s chief executive officer “Viktor Fischer” stated that the industry of crypto assets is cyclical. As per the CEO, the cumulative market capitalization of digital assets went through a decline of more than 80% in the winter of the year 2018.
Nonetheless, the CEO added that the funding of the startups has not stopped and remained steady even during extreme situations. In the words of the executive, the investments made while the prices of the digital assets were under a stress paved the way for usage traction and technology in addition to price recoveries in the bull market.
The European jurisdiction is also considered home to several startups in the crypto space. The reports point out that there are up to 3,977 crypto startups within Europe. Nevertheless, it lags behind the US in terms of the ventures’ cumulative number. The US has many unicorns (firms with a valuation of more than $1B) and funding.
The worldwide investors in the case of European ventures take into account the Digital Currency Group, Blockchain Capital, Coinbase, and Animoca Brands.
The investment in European ventures offering financial services accounts for up to 52% proportion of the entire investments. On the other hand, 16% of investments are secured by the Web3 sector while 32% is allocated for infrastructure.
Nonetheless, in comparison with the year 2021, the startups offering financial services dropped by 19% while infrastructure saw an increase of 24%. The increasing prominence of Europe as a crypto-friendly jurisdiction comes at a time when the policymakers are finalizing the upcoming regulatory framework called Markets in Crypto-Assets (MiCA).
The European Union has postponed the respective regulatory agenda a couple of times while referring to translation-related issues. Laws approved in the EU jurisdiction have the compulsion to be translated into the 24 formal languages that are being utilized by the member states.
At the moment, the reports say that the conclusive voting on the MiCA regulation is planned to occur in April this year.
SUSHI’s TVL Plunges by 93% amid the Exodus of Long-Term Holders
Apart from that, the prominent DeFi platform SushiSwap’s native token SUSHI has seen an enormous slump of 93% in its total value locked (TVL) since 2021’s November.
This signifies a bearish sentiment around the token within the market. Contrarily, Uniswap has just dipped by 63% during the same period, as per Santiment. Along with this, the long-term holders are leaving the altcoin.