TLDR:
- Venture capital interest in Bitcoin startups has exploded, with funding for Bitcoin companies quadrupling in 2023.
- The number of Bitcoin-native pre-seed deals increased by 360% last year, while the number of funded Bitcoin companies rose by 56.9%.
In 2023, despite a decline in overall venture capital activity, funding for Bitcoin startups saw a significant increase, according to research from Trammell Venture Partners (TVP). The report shows that the number of Bitcoin-native pre-seed deals surged by 360%, and the number of funded Bitcoin companies rose by 56.9%. While the absolute number of Bitcoin venture dollars invested decreased by 12.5% to $305 million, the count of Bitcoin venture deals increased by 69.2%. In contrast, the crypto industry experienced a decline of 64.5% in funding and 35.3% in venture deals. Some notable investors in Bitcoin startups included General Catalyst, Y Combinator, and Draper Associates.
The surge in funding for Bitcoin startups aligns with an increase in developer activity on the Bitcoin network. New technological capabilities such as the NFT protocol Ordinals, the Bitcoin computing paradigm BitVM, and the upcoming “Runes” protocol have sparked interest and innovation. This resurgence in developer activity on Bitcoin has also been driven by the need for more efficient layer 2 solutions to address rising transaction fees on the network.
Overall, industry experts are optimistic about the future of Bitcoin-native startups, citing the resilience of the sector in the face of challenges. With a growing number of startups focusing on Bitcoin, the landscape for innovative projects and developments on the network is expanding rapidly.
