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Crypto funding plunged to its lowest level since November 2020 last month as the industry reeled from an FTX-induced contagion.

VC-backed crypto startups raised just $394 million in total in November, according to Crunchbase data. That’s the lowest total since November 2020, when cryptocurrency startups raised less than $200 million.

Funding had declined this year compared to 2021, which is true of almost every industry, but it has apparently recovered somewhat after a dip in July.

That was the same month that lenders Celsius Network and Voyager Digital filed for bankruptcy. In July, cryptocurrency funding fell to $402 million from $1.5 billion the previous month.

The impact of FTX

It’s impossible to blame the drop in funding solely on the drop in FTX, or possibly even any of it. Funding rounds typically close weeks, sometimes months, before they are announced, meaning that most of the deals announced last month closed before the news of FTX’s collapse in early November.

Also, funding in November was down almost everywhere, so it should come as no surprise that cryptocurrencies followed that trend.

However, the numbers could be a worrying omen for an industry still struggling with the dramatic implosion of what was once the fourth largest crypto exchange and many of its affiliates. There are still major questions about what the future holds, not only for those companies, but also for the hundreds of investments and bets that Sam Bankman-Fried has made in other companies in the larger crypto ecosystem.

The market has even already seen companies with no direct ties to Bankman-Fried hit hard by the contagion that has swept through the industry.

Few predict that venture funding will see a significant increase in the next six months, which is likely to be especially true for crypto startups.

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Illustration: Dom Guzmán