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VC Investment in European DeFi Startups Soars 120% in 2022: Data

Despite challenging market conditions, in 2022, VC or venture capital investments among the European crypto startups achieved a new peak of $5.7 billion. 

Detailed Analysis

Despite the bear market and the collapse of some notable industry players, such as Terra and FTX, venture capital investors continued to demonstrate their faith in the crypto space. This commitment to crypto startups despite the turbulent period speaks volumes.

RockawayX, a European investment firm, has reported that venture capital investments in European crypto startups have hit a new high in 2022, totaling $5.7 billion. Furthermore, decentralized finance startups in Europe have seen record-breaking levels of investment, with $1.2 billion being allocated for 2022 — an impressive 120% increase from the investments of $534 million in the preceding year.

RockawayX’s CEO, Viktor Fischer, emphasized the cyclicality of the crypto market. In late 2018, the market cap of digital assets decreased by a staggering 80%, yet the overall startup funding remained quite consistent. 

Europe hosts the most number of crypto startups across the globe at 3,977, based on headquarters locations. However, it is behind the US in terms of startups with more than one million dollars in funding, as well as ‘unicorn’ companies with a value of over $1 billion.

In Europe, over half (52%) of investments have gone into startups providing financial services, in which the infrastructure and Web3 sectors make up 32% and 16% respectively. However, compared to 2021, investment in financial service-based startups decreased by 19%, whereas infrastructure investments rose by 24%.

European Crypto Laws 

The European Union is continuing to strengthen its position as a crypto-friendly region, as it moves closer to enacting the long-awaited Markets in Crypto-Assets (MiCA) regulations. Despite two delays in the process due to translation matters, the EU is making steady progress toward finalizing the laws, which will be available in all 24 official languages of the member states. This is a significant development in the EU’s commitment to providing a secure and transparent environment for the crypto industry.