According to Cointelegraph, August was the worst month for the crypto markets since Bitcoin (BTC) bottomed out in November 2022. The downturn erased 7.3% of BTC’s and 6.9% of Ether’s (ETH) value, causing one of the largest liquidation events in crypto, totaling more than $1 billion lost when the price dropped to $26,000. Venture capital (VC) investment inflows were also down 42.7% in August from July, only bringing in $401.9 million across 77 deals. Investment in the crypto industry was on the rise up until May of this year but has been steadily declining since.
Cointelegraph Research’s “Investor Insights Report” explores how the various sectors of the digital asset space have performed in this environment. Venture capital (VC) investment in the blockchain industry has been declining since the second quarter of 2022 but has hit a new local low in 2023 with $401 million. Infrastructure projects had 18 individual deals and brought in $107 million in August, followed by centralized finance (CeFi) with $100 million only over three deals. Investments in this sector are lagging indicators, suggesting that investments will come back when the overall market sentiment shifts positive.
On August 25, the expiry of $1.9 billion in monthly Bitcoin options caused major speculation in the markets. BTC’s price did not see a dramatic change during this time; however, the markets were excited upon hearing the news of the SEC’s loss in a court ruling against Grayscale, paving the way for a spot Bitcoin ETF in the future. The price jump to $28,000 was short-lived and retraced back to the $26,000 level. While the pump did not sustain in the short term, the silver lining is that the $26,000 range is showing signs of market support.
