Investment in cryptocurrency companies plunged 91% in January from a year earlier. Given that these deals can take months to get done, any funding drought resulting from the November collapse of FTX might not even be fully reflected yet.

Venture capital (VC) and other investments in privately held crypto startups amounted to $548 million last month, a huge drop from $6 billion in January 2022, according to data compiled by CoinDesk. The number of transactions shrank to 62 from 166, and most of the 2023 deals were for smaller, early-stage companies, CoinDesk's analysis shows.

It was a difficult year-over-year comparison for the industry, in part because the 2022 figure caught the tail end of the bull market. There were 17 investment rounds in January 2022 that exceeded $100 million, including the transaction that valued the now-collapsed FTX crypto exchange at $32 billion. An investment in Blockstream was the only deal that big a year later.

Funding rounds can take months to finalize or close, and some of the investments reflected last month were likely already raising money when the FTX collapse started in early November. The coming months will show exactly how much investment capital dried up after the FTX scandal came to light.

FTX’s demise created doubts about the whole centralized exchange (CeFi) model of trading crypto, and persuaded some that decentralized finance (DeFi) and decentralized exchanges (DEX) are the better way forward.

The fundraising data compiled by CoinDesk shows that wariness may have showed up in investments, with CeFi deals sinking 99% to $22.8 million in January 2023. Also, the CeFi firms that managed to raise money had a tie to DeFi. That includes Architect, a startup founded by Brett Harrison, former president of FTX US, which raised $5 million to build trading software.

Infrastructure projects had the softest landing, dropping a relatively small 59% to $357 million, the CoinDesk data shows. That dollar amount was also the highest for any category. Infrastructure startups Blockstream and QuickNode raised $125 million and $60 million, respectively.

VC firms had telegraphed that infrastructure projects might enjoy a tailwind.

When Andreessen Horowitz published its inaugural "state of crypto" report in May, it reiterated its belief that developers build during bear markets, boosting industry optimism and eventually, in theory, asset prices.

In a December interview with CoinDesk, David Pakman, managing partner and venture investing head at crypto-focused VC firm CoinFund, revealed the investment trends he expected would emerge this year, including blockchain and Web3 infrastructure.