Leading bank Morgan Stanley predicts that the amount of venture capital crypto investments may decrease by 50% this year.
Related: Institutionals invested $109M in crypto funds in a week
The institution said in a report, despite the latest fall of the market, crypto investments remain high. Last year, crypto firms secured a record of $30 bln of VC investments.
However, Morgan Stanley finds that there will be a decline to reflect trends in other classes. According to the bank, the downside is expected given that token and equity investments are more difficult at times of crypto bear market. Suchlike pattern was present in the 2018-2019 bear market.
From the end of 2021 and during this year NFTs and games received the most of the investments. In 2020, digital asset infrastructure and financial services led the sector. DeFi was at the center of investments from late 2020 to mid-2021.
Financial markets continue to face challenges globally. Recently, MS strategist Mike Wilson said that while inflation remains high, entering the second half of 2022, the equity market is signaling a continued de-rating and bearishness. However, this week’s strength will result in another bear market rally of around 5%.