TLDR:
- Crypto VC investments in Q2 2024 increased slightly to $3.19 billion
- Median deal size and pre-money valuations also rose, reflecting a competitive investment environment
Crypto VC investment in the second quarter of 2024 showed resilience despite a general market lull, as reported by Galaxy Digital. Venture capitalists invested $3.19 billion into crypto and blockchain-focused companies in Q2, a slight increase from the previous quarter. The total number of crypto venture deals rose by 8%, approaching record levels set in 2022. Median deal size and pre-money valuations also increased significantly, with Web3, Layer 1 projects, and Bitcoin Layer 2 projects leading the investment categories. However, there was a notable divergence between venture capital trends and cryptocurrency market performance, suggesting a more complex investment landscape for 2024. With generalist VCs on the sidelines, crypto-focused venture capitalists are facing increased competition, potentially giving founders more leverage in negotiations. The report also highlights the dominance of the US in terms of deals and capital invested, but regulatory headwinds could push companies to seek funding and operations abroad. Despite these challenges, Galaxy Digital estimates that 2024 is on track to see the third-highest investment capital and deal count, behind only the peak years of 2021 and 2022. The report suggests that allocators may be preparing to return to the market in earnest, leading to increased venture capital activity in the latter half of the year.
