GameFi and NFTs Set to be First to Recover From Downturn as Venture Funds Flow In
Venture capital funding for NFT and gaming companies within crypto rose by 66% in August, from USD 507 million in July to USD 842 million. This increase comes during a month when total VC funding within the cryptocurrency sector declined overall, suggesting that it may be NFT and GameFi cryptocurrencies that lead the way out of the ongoing bear market.
The funding data, collected by the Block, reveals a fourth consecutive month of overall decline, with August's total of USD 1.85 billion some way off the USD 4.8 billion recorded in January. Still, the amount raised by NFT and GameFi firms provides some hope for a gradual turnaround in the cryptocurrency market's fortunes, with the sector also representing the highest absolute amount raised in August, in addition to biggest rise in percentage terms.
It's not the first time that NFTs and gaming have taken the lion's share of VC funding in crypto. As the chart below illustrates, these two areas of the ecosystem also claimed a majority of overall funding in April and January of this year, as well as in November of last year.
What's different this time around is that, in another month of contraction for funding, NFTs/GameFi was the only sub-sector to enjoy a rise in funding. At a time when cryptocurrency prices are still down by 8.5% over a month ago and by 63.6% since November, this increase in VC interest potentially signals a turnaround.
Indeed, some of the biggest-rising coins in the market are related to NFT and gaming platforms. ApeCoin (APE), for example, has risen by 21% in the past week alone, while Flow (FLOW) is up by 7.5% and Chiliz (CHZ) is up by 25% in the past month.
Likewise, in the gaming category, Ultra (UOS) has risen by 25% in a week and by 15% in a month, while
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