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After record growth: Venture capital investments fall 38 percent in May



 The short-term drop in investment is due to the recent market correction, which has seen Bitcoin ( BTC ) and other major cryptocurrencies plunge as much as 50 percent or more.


According to the latest data from Dove Metrics, venture capital investments in cryptocurrencies fell 38.2 percent overall last month, from $6.8 billion in April to $4.7 billion in May. Compared to the previous year, however, they have increased by 97.8 percent.


The investment distribution data shows that infrastructure companies accounted for 21 percent and DeFi startups for 14 percent. CeFi and NFT projects each accounted for 13 percent. 


This shows that venture capital funds prefer to play it safe and invest in core technologies that actually bring innovation to the crypto space. They currently prefer to stay away from riskier projects.


Projects like Xendit, a Southeast Asia-focused payments solution, and Lithosphere, a next-generation platform for cross-chain decentralized applications, have collectively raised $700 million.


In May, Sam Bankman-Fried, the founder of the popular crypto exchange FTX, invested the largest amount at $650 million . This investment went to the popular trading platform Robinhood. At the same time, Bankman-Fried acquired 7.6 percent of the company's shares.


Renowned analytics firm Chainalysis and well-known crypto exchange KuCoin have also each raised over $150 million.


The data shows that the United States leads the way when it comes to venture capital investments. Then comes Singapore and Hong Kong. This statistic reflects the global trend for venture capital .


One of the largest venture capitalists is hedge fund Andressen Horowitz, which raised $4.5 billion for Web3 projects, bringing the total invested in crypto to $7.6 billion. The company is known for having backed several successful projects such as Coinbase or Solana ( SOL ).


Another big name is NGC Ventures from Singapore. This recently raised 100 million US dollars and has its focus on "promising projects" in the Web3 area. For example, the company has invested in Algorand ( ALGO ) and Oasis (ROSE).


Despite the current crypto bear market, venture capital investors are more active than ever . JPMorgan said the recent collapse of the Terra ecosystem has had no impact on venture capital. This shows that there is fundamental confidence in the long-term development of crypto and blockchain technology. Innovative technologies such as Web3 and DeFi are particularly in the foreground.

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