Crypto crash forces VCs to turn around: focus on secure infrastructure!

Crypto crash forces VCs to turn around: focus on secure infrastructure!

The recent crypto crash has fundamentally changed the investment landscape in the venture capital (VC) sector. According to Arthur Azizov, founder of B2 Ventures, the October collapse, which left investors with $19 billion in losses, has resulted in increased risk scrutiny among VC investors. Against this background, investors are increasingly showing a selective attitude towards new projects and are prioritizing infrastructure projects over classic crypto products. These changes are part of a broader market maturation characterized by higher interest rates and the need for a solid economic base.

In the current phase, institutional investors are primarily required to tighten their risk assessments. In particular, the quality of the collateral and the liquidity of the investments are now being assessed more intensively. As a result, many funds are reducing their risk appetite and placing greater emphasis on transparency from platforms and partners. In the future, VC investors want to invest more in startups that have robust risk management systems and are active in infrastructure projects in the crypto sector.

Focus on infrastructure and trends in the VC space

Current trends in the VC sector show that investments are increasingly focused on crypto infrastructure, tokenized real-world assets, and data and risk analytics. Azizov highlights that future investment decisions will heavily depend on teams capable of overcoming regulatory challenges and delivering institutional products. This requires not only technical expertise, but also the ability to work under pressure and adapt to various market changes.

Another notable trend during this time is the continued investment in artificial intelligence (AI). In the second quarter of this year, over $1 billion flowed into five US AI startups. This shows that despite the tightening of risk assessment in the crypto space, interest in innovative technologies remains strong. Consolidation in the VC space is leading to fewer firms closing the biggest deals, which is widely seen as a sign of market maturation.

Macroeconomic influences on investment decisions

In addition to internal factors that already influence investment strategies, macroeconomic aspects also play an important role. Monetary policy and geopolitical tensions significantly influence investor decision-making. Against the backdrop of higher interest rates, investors' focus was on sustainable business models and clear economic fundamentals. This development shows that market conditions present not only new opportunities but also new challenges for investors.

Overall, the landscape of VC investments in the crypto space is being shaped by a variety of factors that are leading to profound change. Future investment strategies will therefore crucially depend on how well teams respond to challenges and are able to adapt their business models accordingly. The developments of the last few months have clearly shown that the time for simple, unthinking investments is over. The requirements for transparency and robustness will increase as investors specifically look for solutions that can survive in a constantly changing market environment.

For more details and analysis on the current trends in the VC space, you can check out the reports from Crypto News and follow other expert opinions.