Crypto industry executives remain positive about the long-term potential of cryptocurrencies, despite a recent downturn in venture capital (VC) funding. The second quarter of 2023 saw one of the lowest performances in terms of crypto fundraising, with an 83% decrease compared to the previous quarter. However, professionals working in the space believe that this slowdown does not diminish the belief in the industry’s future.
Gvantsa Chkuaseli, head of structuring and fundraising at Web3 accelerator Outlier Ventures, noted that despite the challenging conditions, there has been an uptick in activity, indicating sustained investor confidence in blockchain’s long-term potential. Chkuaseli highlighted recent successful funding rounds, such as Mawari’s $6.5 million seed round and Zinc’s $5 million Series A, as evidence of continued interest in the sector.
Saqr Ereiqat, co-founder of Crypto Oasis, emphasized the positive takeaways from the downturn. He stated that the current situation allows for a more discerning selection process, ensuring that only the most promising projects receive funding. Ereiqat acknowledged the challenges faced by struggling projects due to the scarcity of funding opportunities but stressed the importance of strategic decision-making in such circumstances. AI-focused projects continue to attract substantial investments, with examples like Inflection AI raising $1.3 billion.
Phillip Lord, president of Oobit, emphasized the need for entrepreneurs to focus on building companies with sustainable business models and clear revenue streams. Lord believed that embracing artificial intelligence could significantly reduce burn rates for companies and lead to solo entrepreneurs earning substantial incomes without large staff.
Overall, while VC funding for cryptocurrencies experienced a downturn, industry professionals express optimism about the long-term prospects. The slowdown in funding allows for a more selective investment process, highlighting truly innovative ventures. Additionally, AI-focused projects continue to attract significant investments, and embracing AI could lead to more sustainable operations for companies. Strategic decision-making and building clear revenue streams are crucial factors for success during these challenging times.