TLDR:
- Crypto-related VC funding rose by 2.5% in Q4 of 2023, reaching $1.9 billion.
- The increase in funding was primarily driven by the launch of the first spot Bitcoin ETFs in the US.
Crypto-related VC funding experienced a 2.5% rise in the fourth quarter of 2023, reaching $1.9 billion. This increase marks the first time since March 2022 that funding in this sector has seen a rise. The surge in interest can be attributed to the launch of the first spot Bitcoin ETFs in the US in January. Ventures in the financial and technological sectors, such as companies tokenizing real-world assets and developing decentralized computing infrastructure, received significant funding. Notable fundraises included Swan Bitcoin and Blockchain.com receiving $165 million and $100 million, respectively. The largest deal of $225 million was secured by Wormhole, an open-source blockchain development platform backed by Coinbase Ventures, Jump Trading, and ParaFi Capital, with a valuation of $2.5 billion.
During 2022, the crypto industry faced challenges, resulting in lower venture capital funding due to economic challenges. Venture capital investments took a hit following the collapse of the Terra ecosystem, leading to the bankruptcy of cryptocurrency lending firms like Three Arrows Capital and Celsius. However, in the first quarter of 2023, crypto firms raised $2.6 billion in 353 investment rounds, marking a turnaround for the industry. The subsequent quarters saw an increase in investment, boosted by the entry of significant traditional finance institutions like BlackRock into the crypto market.
