In some cases, this meant skipping out on conducting appropriate due diligence. Two years ago, during peak mania and sky-high valuations, VC firms were doing all they could to secure the bag. They think that the full potential of this technology hasn’t been realized.” Change of tack “People still see use cases for blockchain. While the FTX scandal was a massive blow across the board, Miller pointed out an acknowledgment that this was unrepresentative of the industry as a whole. There are still people who see potentiality with blockchain technology, said Miller.
“Crypto-native” VCs remain faithful to the cause as they continue stumping up billions of dollars of investments, despite the scandals and general lull in price action. “We had a lot of big named venture capitalists who are very established, they are known for investing in a broad array of tech companies, and they came into crypto, started backing companies like FTX, and now those generalist VCs are starting to pull back.” Part of the reason boils down to a divide between general VCs and crypto-specific VCs, with the former having withdrawn significantly in recent times. Reporter Hannah Miller said investment appetite for high-risk industries had shifted dramatically among investors. However, driven by a belief that blockchain technology has more to offer, crypto-specific VCs are staying the course. The dramatic plunge in activity was driven by general VC tech firms, whose risk appetite for digital asset investing has diminished amid the many recent scandals that have plagued the industry. Crypto investing by Venture Capitalists (VC) fell 75% in Q4 2022 versus the same period in the prior year, according to Bloomberg.
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