In the face of a tumultuous year for the crypto industry, European venture capital investments in crypto startups have reached an all-time high of $5.7 billion in 2022. The numbers come from a new study by European investment firm RockawayX.
Despite ongoing market volatility and the high-profile collapse of several prominent players, investors continued to support European crypto startups, which saw a 120% increase in investment from the previous year. That is a healthy sign, although one that can easily be overlooked. Moreover, the decentralized finance industry still has many issues that require solutions.
The CEO of RockawayX, Viktor Fischer, highlighted that the crypto market is cyclical and that despite the 2018 market crash, startup funding activity held steady.
Europe is home to the most crypto startups, with 3,977 headquartered in the region. However, it needs to catch up to the United States regarding the number of startups with over a million dollars of funding and unicorns. That will prove a tall order, as it cannot be “triggered” overnight.
Financial service-based startups accounted for more than half (52%) of all investments in Europe, with infrastructure and Web3 making up 32% and 16%, respectively. However, investment in financial service-based startups declined by 19% compared to 2021, while infrastructure grew by 24%.
Europe’s growing prominence as a crypto-friendly region comes as lawmakers in the European Union finalize the Markets in Crypto-Assets (MiCA) regulations, which have been postponed twice due to translation issues.
The regulations will ensure a regulatory framework for the industry. In turn, it is expected to attract further investment and growth to the region.
Top global investors in European startups include Animoca Brands, Coinbase, Blockchain Capital, and the Digital Currency Group.
Despite the industry’s challenges, the strong investment figures demonstrate the growing confidence in the potential of crypto startups in Europe.
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