TLDR:
- Venture capitalists invested $3.2 billion in Q2 in the crypto sector, defying market trends.
- Significant amounts of funding went towards web3 projects, DAOs, the metaverse, and gaming.
Venture capitalists are defying market trends by investing a staggering $3.2 billion in the crypto sector in Q2, according to a report by Galaxy Digital. This marked a 28% increase from the previous quarter, indicating a positive trend in crypto venture capital sentiment. A notable portion of the funding, totaling $758 million, went towards web3 projects, decentralized autonomous organizations (DAOs), the metaverse, and gaming. Within this category, Farcaster, a social media protocol, secured the largest raise of $150 million.
Furthermore, the report highlighted investments in layer 1 projects and Bitcoin layer 2 solutions. Monad Labs, aiming to create a faster version of Ethereum, raised $225 million, while Berachain, a layer 1 project, secured $100 million. The interest in Bitcoin layer 2 solutions, aiming for more efficient transaction processing on top of the Bitcoin blockchain, also saw significant growth.
Overall, the second quarter saw a total of 577 crypto deals, with early-stage investments making up nearly 80% of the total funding. The surge in funding for crypto startups has been on an upward trajectory, surpassing $100 billion since May 2014. The recent research indicates that the majority of cryptocurrency funding comes from investors in the United States, with other countries like the United Kingdom and Singapore also contributing.
High-profile funding deals have taken place in late 2023 and the first half of 2024, with companies like Together.AI, Wormhole, Totter, and Eigenlayer securing substantial investments. These investments demonstrate continued confidence and interest in the cryptocurrency industry despite market fluctuations.
