TLDR:
- Crypto venture capitalists invested $2.3 billion in the first quarter, falling short of Bitcoin’s price surge beyond $73,000.
- New market trends, such as the launch of Spot Bitcoin ETFs and uncertainty around the Federal Reserve interest rates, may have influenced the low VC investment.
According to Galaxy Research data, crypto venture capitalists invested around $2.3 billion in the first quarter of FY24, while Bitcoin’s price surged beyond $73,000. Historically, VC investments align with changes in the Bitcoin price, but this time the investment fell short. The gain in VC investment wasn’t as high as expected, even though it increased significantly from less than $2 billion. The emergence of new market trends, such as the launch of Spot Bitcoin ETFs, crypto restaking, and uncertainty around Federal Reserve interest rates, could be potential reasons for the dissatisfactory amount of VC investment. Moreover, VC investors may have chosen to invest in the Spot Bitcoin ETFs instead of holding BTC directly, but their holdings are yet to be disclosed. As a result, the low VC investment could reflect market uncertainties and new trends.
The Bitcoin price recently rebounded from a low of $56,000, reaching $63,729.73 with a market cap of $1.25 trillion. Positive U.S. job data and the resurgence of Bitcoin ETF inflows have contributed to this rebound. All Spot Bitcoin ETFs recorded inflows for the first time since launch, including Grayscale’s GBTC, with an influx of $378 million. This rebound in Bitcoin price comes as a positive sign amidst market uncertainties and new trends influencing VC investments in the crypto market.
