What are the most active crypto VCs investing in?

DeFi is most popular with VCs, followed by GameFi and blockchain infrastructure.

Written by: DefiNapkin

Compilation: Luffy, Foresight News

Following the “smart money” is a great way to discover potential narratives, and catching them early can lead to a huge return on investment. Here are 5 top crypto VC investing trends for 2023.

As the chart below shows, with the exception of March, venture capital activity was virtually at a standstill throughout the first quarter of 2023.

Further research will find that venture capital is often closely related to the overall market conditions. The following table is a good illustration. 👇

If we look closely, we can see that investment activity tends to lag slightly behind market price spikes. The crypto market bottomed out in the last quarter, and Bitcoin prices started to recover. This seems to mean that crypto venture capital may recover in the second quarter.

Despite the downward trend in total investment value, the number of deals increased in Q1 2023, with 439 deals completed, up from 366 deals in Q4 2022. The increase in the number of deals was mainly driven by investments in the pre-seed stage.

Next, let’s look at specific investments by investor and category.

Overall, DeFi is the most popular with VCs, followed by GameFi and blockchain infrastructure.

The five most active crypto VCs are as follows:

• Coinbase Ventures
• Animoca Brands
• Shima Capital
• HashKey Capital
• Big Brain Holdings

What projects are they investing in in the first quarter of 2023? 🧐

Coinbase Ventures primarily invests in blockchain services, followed by DeFi.

Animoca Brands mainly invests in GameFi, followed by NFT.

Shima Capital mainly invests in GameFi, followed by DeFi.

HashKey Capital primarily invests in blockchain services, followed by DeFi.

Big Brain Holdings primarily invests in DeFi, followed by blockchain services.

The trend is obvious, VCs are focusing on blockchain infrastructure, DeFi and GameFi.

Why do VCs favor these areas? They are at the forefront of mass adoption.

• Infrastructure is the foundation of DeFi. DApps are built on it, and it usually captures the most value.
• DeFi is an area where innovation and new products explode.
• GameFi is a huge untapped potential market.

Compared with the past two years, the number of investments in the first quarter did drop; however, in the long-term perspective, venture capital activity is several times higher than it was four years ago.

The activity of venture capital depends on the trend of Bitcoin price and the overall performance of the encryption market. I think the crypto market will grow again as regulation becomes clearer.