While the crypto market may be down, and heads are still spinning after the recent Terra Luna/UST collapse, investments in blockchain and cryptocurrency startups are up in the first quarter of 2022, according to a report published by CB Insights.
That State of Blockchain Q1’22 Report shows that crypto and blockchain startups raised $9.2 billion in the first quarter of this year. A total of 461 equity deals went through around the world, a 4.5 percent increase over Q4 2021 and 155 percent above Q1 2021. What does this mean for the blockchain and cryptocurrency sector considering the recent market crash and expected economic downturn?


Global Blockchain Funding is Up for 7th Straight Quarter
The first thing it means is that crypto and blockchain venture investors are undeterred by economic downturns. At least, anything short of a depression.
CB Insights reports that global funding in blockchain and cryptocurrency startups is up for the seventh straight quarter. In other words, dating back to Q3 2020, during the pandemic crisis that led to business shutdowns across the country, investors began pouring money into the blockchain sector to fund startups.
By July 2020, much of the economy was recovering from the initial shutdowns, however, the economy had not completely recovered. Many businesses were using Zoom for meetings and remote work was on the rise. That didn’t stop investors from seeking startups to fund, especially in the blockchain and cryptocurrency sector.
In Q3 2020, the amount of investment in the sector was less than $1 billion. By Q1 2021, it was over $3.5 billion. It has steadily climbed since then.


Blockchain and Crypto Funding is Moving Against Investments in Other Sectors
In its State of Venture Q1’22 Report, CB Insights that venture funding overall is moving in the opposite direction. In fact, global venture funding was down 19 percent from the previous quarter. Still, the number of deals in Q1 2022 exceeded 8,800 and totaled $143.9 billion. That number eclipses the funding in the blockchain and cryptocurrency sector.
This signals two things:
1. Investors may be concerned about a possible recession and are pulling back from funding startups overall; and
2. Some investors are shifting their priorities toward blockchain and crypto startups
Even with a downward shift in global funding, the number of unicorns hit a new global high in Q1 2022, at 1,070. That’s up 62 percent year over year, but down 15 percent from the previous quarter. Twenty percent of global funding went to fintech companies.


Web3 Was the Big Winner in Q1 2022
Fourteen new blockchain or crypto unicorns were born in Q1 2022. Yuga Labs and Immutable are the most valuable, both specializing in non-fungible token (NFT) applications. That moves the total number of blockchain and crypto unicorns to 62.
The first quarter of the year was also a record quarter for the number of mega deals in the blockchain and cryptocurrency space. A total of 28 venture funding deals with more than $100 million raised made up just 6 percent of the total number of deals and 63 percent of total funding. Eight of the 12 largest funding rounds went to Web3 startups.

Fireblocks, a digital asset infrastructure company, raised the most capital, $550 million in a Series E round led by D1 Capital Partners and Spark Capital.
Web3 is a catch-all term for a permissionless and decentralized internet, building on the infrastructure of Web 1.0 and the interactive nature of Web2. It generally refers to the popular NFT phenomenon and its various applications, decentralize apps (dapps), and decentralized autonomous organizations (DAOs). Still in its infancy, Web3 is a reimagined internet that allows participants more sovereignty over their identities, their digital assets, and how they interact with the internet overall.
As funding in cryptocurrency and blockchain startups continues to grow, we’ll see more interesting developments occur across the spectrum. It just keeps getting better every day.


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