Despite the crypto collapse, VCs are still investing billions in blockchain plays

by Arthur · December 19, 2022

Crypto and blockchain-based assets have had an incredibly turbulent year.

Bitcoin (CRYPTO: BTC) is down 74% from all-time highs, and the daily volume of the OpenSea non-fungible token (NFT) has fallen 97% from previous records. However, this has not deterred venture capitalists (VC) from investing billions in the blockchain-based gaming market.

In 2022, VCs and angel investors invested over $3.4 billion in the blockchain gaming (GameFi) space, including $534 million in October and November alone. This is surprising given the general decline in not only the crypto and stock market, but also a steep decline in VC investment in general.

Why it’s important: Investments from venture capitalists can often be a strong predictor of future trends, which can provide insight into good industries to invest in as they gain momentum.

For example, startup Gameflip is riding on StartEngine – meaning anyone can invest – and has raised over $10 million from Silicon Valley VCs to facilitate its gaming and blockchain-based marketplace.

This may be due to the growing trend of mainstream adoption of NFTs in games. Special, GameStop Corp.‘s (NYSE: GME ) NFT gaming and collectibles store has been slowly picking up steam with over $2 million in volume in the past month alone. The game marketplace also lists 20 blockchain-based games.

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While VCs are still pouring money into the space, it’s certainly not immune to volatility. For example, top mainstream titles like Axie Infinity and The Sandbox, which once dominated the market and the news cycle, no longer rank among the top 10 most active games on the market, according to a study by CoinMarketCap.

Not only are GameFi investments holding strong overall, but they are also outperforming investments within the blockchain industry. In 2021, for example, GameFi and the metaverse accounted for roughly 11.54% of all funding going to blockchain-based companies. In 2022, this number is 17.64%, which means that they are the best investment-based trends going into 2023.

Some other growing trends are gaming marketplaces and infrastructure such as Gameflip and GameStop, growing at 9.23% from approx. 3.18%.

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