TLDR:
- VC investments in crypto projects increased in the first quarter of 2024
- Overall pace of VC investments slowed down compared to previous years
In the first quarter of 2024, the crypto sector saw a notable uptick in venture capital (VC) funding. Startups secured a total of $2.4 billion across 518 deals, representing a 40.3% increase in invested capital and a 44.7% rise in deal volume compared to the previous quarter. The largest deal of the quarter was claimed by Together AI, an open-source decentralized cloud platform developer for large foundation models.
Despite the quarterly gains, the overall pace of VC investments into crypto projects has slowed down compared to the explosive growth seen in 2020 and 2021. VC investments in crypto are projected to reach $12 billion in 2024, marking only a modest 2.4% increase from the previous year. However, if no major market downturns occur, positive sentiment could continue to bolster investments throughout the year.
The future of VC investment sentiment also depends on regulatory developments and political outcomes. The upcoming US presidential election could significantly impact the regulatory landscape, with potential implications for the crypto industry. A reduction in interest rates by the US central bank could potentially ignite a surge in crypto investments, pushing the year’s total to around $21 billion.
