Just the right time to start a position? Cryptocurrency investment and financing were bleak in the first half of 2023, but a dark horse investor emerged unexpectedly.

Perfect timing for a new position? Cryptocurrency investment and financing were grim in H1 2023, until an unexpected dark horse investor appeared.

In the first half of this year, the cryptocurrency secondary market has emerged from the shadow of last year’s bear market. The price of Bitcoin has risen from a low of 16,477.6 USDT to a high of 31,550 USDT, with a maximum increase of over 90%. This upward trend has brought some relief to investors. Perhaps with the secondary market coming out of the bear market, the investment and financing situation in the primary market will improve in the second half of the year.

Recently, there has been news of turbulence in the venture capital team of Sequoia Capital. Two cryptocurrency investors have resigned. These two investors had invested in the collapsed cryptocurrency exchange FTX, causing Sequoia to lose $214 million. The turbulence at Sequoia Capital reflects the investment and financing situation in the cryptocurrency market in the first half of this year. From the data of the first half of the year, the overall investment and financing situation in the primary market was very bleak, with the financing amount almost halved compared to the previous period.

However, not all news is bad. The turbulent market is also considered the best time for investment. In the first half of this year, a “dark horse” appeared in the VC circle – DWF Labs. It made a total of 32 investments in the first half of the year, far exceeding other investment institutions, and claimed on its official website to “invest in an average of 5 projects per month regardless of market conditions”.

On the other hand, in the first half of this year, the cryptocurrency secondary market has emerged from the shadow of last year’s bear market. The price of Bitcoin has risen from a low of 16,477.6 USDT to a high of 31,550 USDT, with a maximum increase of over 90%. This upward trend has brought some relief to investors. Perhaps with the secondary market coming out of the bear market, the investment and financing situation in the primary market will improve in the second half of the year.

1. Overall situation is bleak, financing amount almost halved

First, let’s take a look at the overall investment and financing situation in the market over the past half year. Since the collapse of LUNA and FTX last year, the global cryptocurrency market has entered a deep bear market. Whether it’s Bitcoin or NFT, whether it’s the primary market or the secondary market, it can be said to be in a state of desolation. From the data, both the financing amount and the number of financing events have seen a significant decline compared to the second half of last year, with the financing amount dropping by 46.1%, almost halved.

2. Investment amount and number are both declining, infrastructure remains the hottest track

From the trend, both the number and amount of investments have been declining for five consecutive quarters since the first quarter of last year. Currently, institutions are still cautious about investment, and there are no signs of the “investment and financing bear market” hitting bottom.


In terms of track classification, infrastructure is still the most popular among institutional investors, ranking first in terms of both financing amount and number of investments. However, when comparing the average financing amount per transaction, CeFi has the highest average financing amount. It seems that although CeFi has fewer financing rounds, each round can raise a considerable amount of money.


If we look at it from a vertical perspective, the financing amounts of all tracks are showing a downward trend.


Unit: 100 million US dollars. Source: ROOTDATA

The number of financings has rebounded slightly this year, but still has a significant gap compared to the previous peak.


Number of financings in each track. Source: ROOTDATA

From a project perspective, the top ten projects in terms of financing scale are Blockstream (infrastructure), LayerZero (infrastructure), Worldcoin (digital currency), Ledger (infrastructure), Auradine (infrastructure), Chain Reaction (infrastructure), Taurus (infrastructure), Salt Lending (CeFi), Unchained Capital (CeFi), and EOS (infrastructure).


Surprisingly, among the top ten funded projects, 7 are in the infrastructure track, 2 are in the CeFi track, and 1 is in the digital currency track. It seems that infrastructure is well-deserving of being the most favored track by investors. The prosperity of Web3 applications requires a strong and robust infrastructure as a guarantee. In periods of uncertain industry development prospects, investing in “shovels” is often the optimal choice.

III. Market Surprises with “Dark Horse” Investors, Investing in 32 Projects in Six Months with Generous Investments

According to our incomplete statistics, the institution with the most investment transactions in the first half of this year is DWF Labs, with a total of 32 investments, making it the “dark horse” in this year’s VC circle.

Investor investment transactions. Source: ROOTDATA

DWF Labs is not a traditional giant, but an emerging investment institution established in 2022. DWF Labs is a Web3 venture capital and market maker, providing market-making, secondary market investment, early-stage investment, over-the-counter (OTC) trading services, as well as token listing and consulting services for Web3 companies.

DWF Labs’ investment philosophy is somewhat aggressive, with their official website stating “regardless of market conditions, an average of 5 projects are invested in each month.” Andrei Grachev, Managing Partner of DWF Labs, stated in an interview that the current turbulent market is the best time to enter the investment field, and they have accumulated enough funds from profits to invest in projects. In most cases, DWF Labs invests in projects by directly purchasing tokens.

In addition, DWF Labs is part of Digital Wave Finance (DWF), which is one of the world’s top cryptocurrency traders, trading spot and derivatives on more than 40 top exchanges. Perhaps the strong background is also an important source of confidence for this “newcomer” to make aggressive moves in a bear market.

It is worth noting that the famous investment institution a16z did not appear in the top ten rankings. In the first half of 2023, a16z made a total of 14 investments, significantly fewer than the 25 investments in the second half of last year. The decrease in the number of investments by a16z may also reflect another aspect of the bear market in the entire cryptocurrency market.

Now let’s take a look at the “investment preferences” of some famous investment institutions:

Investment map of HashKey Capital. Source: ROOTDATA

HashKey has a “special liking” for infrastructure, accounting for over one-third of all investment projects, at 34%. The second and third places are DeFi (17.6%) and CeFi (9.4%) respectively.

Investment map of Coinbase Ventures. Source: ROOTDATA

Coinbase Ventures also prefers to invest in infrastructure (29.4%), but compared to HashKey, its investments are more evenly distributed. The second place investment is DeFi (24.9%) and the third place is CeFi (11.6%), both higher than HashKey.

Investment map of Circle Ventures. Source: ROOTDATA

Circle Ventures prefers to invest in both DeFi and infrastructure, with equal proportions of 30.6%. The third place is CeFi (13.3%).

Investment map of a16z. Source: ROOTDATA

Unlike the preferences of the previous three institutions, a16z’s investment preferences are more unique. Unlike the previous three institutions’ preferences for infrastructure, DeFi, and CeFi, a16z’s second and third place investments are in games and NFTs. a16z’s investments also appear to be more evenly distributed. Apart from dominating in infrastructure (28.3%), the proportions in the Games (13.3%), NFTs (11.8%), DeFi (11.8%), and Social & Entertainment (11%) sectors are similar.

Four, the top ten most popular projects

In the first half of this year, the top ten projects with the highest financing amounts are as follows:

1. Blockstream

Blockstream is a leading blockchain development company founded in 2014. Blockstream’s core focus is on developing new infrastructure for traditional financial systems, with key developments revolving around Bitcoin sidechains and other blockchain-related applications. Their flagship technologies include their own implemented Lightning protocol and Elements Project, which is a blockchain platform that supports open-source sidechains. Blockstream has launched many products such as Liquid (a Bitcoin-based inter-exchange settlement network), Blockstream Green (a secure Bitcoin wallet), as well as other products that provide real-time and historical cryptocurrency trading data, and hosting services for Bitcoin mining operations.

The investors include well-known investment firms such as Blockchain Capital and Ethereal Ventures.

2. LayerZero

LayerZero is a full-chain interoperability protocol designed for lightweight cross-chain messaging. LayerZero provides trusted and secure message delivery with configurable trustlessness.

The investors include Coinbase Ventures, Circle Ventures, Binance Labs, a16zCrypto, and FTX Ventures, among others. It seems that many top institutions have high expectations for this project.

3. Worldcoin

Worldcoin is a new global cryptocurrency designed to become the world’s largest and most inclusive cryptocurrency network by providing Worldcoin to everyone for free. Worldcoin has built a device called Orb, which captures an individual’s eye image and converts it into a short digital code to verify if the person has registered. If not, they will receive free Worldcoin shares. The original image does not need to be stored or uploaded.

The investors include Coinbase Ventures, a16z Crypto, Blockchain Capital, among others.

4. Ledger

Ledger is a cryptocurrency hardware wallet company that develops secure infrastructure solutions and blockchain applications for individuals and companies using its unique proprietary technology.

The investors include Blockchain Capital, among others.

5. Auradine

Auradine is dedicated to developing breakthrough solutions for future internet infrastructure, supported by revolutionary blockchain, security, zero-knowledge, and artificial intelligence technologies, with a focus on scalability, sustainability, and security.

The investors include DCVC, Mayfield, among others.

6. Chain Reaction

Chain Reaction is designing the future of disruptive blockchain and privacy technologies by accelerating computational performance. The company collaborates with cloud service providers and data centers to optimize energy-efficient, high-performance computing using custom ASICs and system-modified computing infrastructure. Its 3PU™ (Privacy Protection Processing Unit) greatly accelerates real-time operations of privacy-enhancing technologies on encrypted data, transforming the cloud into a trusted environment and enabling vertical industries that rely on privacy big data to utilize the cloud (including financial institutions, healthcare and large pharmaceuticals, defense and government, and oil and gas).

The investors include Morgan Creek Digital, Hanaco Ventures, among others.

7. Taurus

Taurus provides enterprise-grade infrastructure to issue, custody, and trade any digital assets, including staking, tokenized assets, and cryptocurrencies. Taurus also operates a regulated private asset and tokenized securities marketplace.

The investors include Tezos, Credit Suisse, among others.

8. Salt Lending

SALT lending provides personal and business loans to members who use blockchain assets as collateral.

9. QuickNode

Unchained Capital is a Bitcoin-native financial services company that offers collaborative custody, trading desks, Bitcoin-backed loans, and Bitcoin retirement accounts.

The investors include Valor Equity LianGuairtners, NYDIG, among others.

10. EOS

The EOS public blockchain is built on the EOSIO open-source software framework, enabling developers to create decentralized applications for the real world.

The investors include DWF Labs, and others.


Looking at the overall situation of primary market investment and financing, off-market investors lack confidence in the entire crypto circle, with both the investment amount and quantity significantly declining compared to previous years. However, even in such a poor market, there are still aggressive players like DWF Labs, who are fiercely “bottom fishing,” illustrating the investment philosophy of “others fear, I greed.”

R3PO believes that it is not advisable to be too pessimistic about such a bleak primary market situation, because the secondary market has already begun to gradually emerge from the shadow of a bear market. Generally speaking, the investment conditions of the primary and secondary markets will not deviate from each other in the long term, and the profit-making effect of the secondary market will inevitably be transmitted to the primary market. Therefore, even in deep bearish conditions, it is important to remain sensitive to the investment and financing situation. Tracking the projects and tracks that investors favor may be the ignition point for the next crypto bull market.