According to the latest report from PitchBook, the funding for cryptocurrencies has tumbled by over 60% in the third quarter of 2023, as compared to the same period last year. The decrease in investment sentiment has prompted leading cryptocurrency exchange Coinbase to scale back its support for crypto-related startups.

Data reveals that Coinbase’s investment arm, Coinbase Ventures, engaged in only 11 funding deals during Q3 2023. This marks a significant decline of 64.5% compared to the previous year when the exchange facilitated over 30 funding deals. Similarly, another American crypto exchange, Kraken, has also reduced its funding for startups, with the number of deals decreasing from 12 in Q3 2022 to just six in Q3 2023.

However, Binance’s funding incubator, Binance Labs, bucked the trend by increasing its investment activity by 6% during the same period. Binance Labs managed to close 16 funding deals in Q3 2023, compared to 15 deals in Q3 2022.

PitchBook crypto analyst Robert Le attributes this changing sentiment to investors adopting a more cautious approach, focusing on their core business amid the current environment. Coinbase clarified that it has not completely withdrawn support for crypto startups, but is instead taking a more targeted approach by funding overseas projects. The exchange cited instances where companies and founders have expressed interest in excluding the U.S. from their business plans and serving international customers.

While Coinbase has consistently advocated for a more crypto-friendly market in the U.S., the company acknowledges that the regulatory environment and enforcement approach are leading to a disappointing trend in crypto development within the country.