TLDR:
- Crypto VC investment surged in Q1 2024 with $2.49 billion invested through 603 deals.
- Bitcoin ETF emergence, upgrades in Bitcoin layer-2 solutions, and restaking contributed to the increase in investments.
Cryptocurrency and blockchain projects saw a rebound in venture capital investment in the first quarter of 2024, following three quarters of decline. According to Galaxy Research, $2.49 billion was invested in the sector through 603 deals, marking a 29% increase in funding and a 68% rise in the number of transactions. This resurgence was attributed to the emergence of the Bitcoin ETF, upgrades in Bitcoin layer-2 solutions, and restaking activities.
The increase in investments, however, is still below the levels seen when Bitcoin exceeded $60,000. At the time of reporting, the Bitcoin price stood at $63,009.53 with a 4.06% trading volume over the last 24 hours. The majority of investments, around 80%, were directed towards early-stage startups, indicating a cautious approach by funds towards high-risk late-stage firms. Large generalist venture capital funds made minimal investments in later-stage companies.
The infrastructure segment received the largest share of investment in the sector at 24%, driven by significant funding rounds such as EigenLayer’s $100 million raise. The United States continued to lead in crypto venture capital flows, accounting for 37.3% of the total venture deals made in the sector during the quarter.
