TLDR:
- Venture funding for crypto-related companies rose by 2.5% in Q4 2023, totaling $1.9 billion.
- The increased interest in crypto from financial institutions can be attributed to the launch of the first spot Bitcoin exchange-traded funds (ETFs) in the United States.
A report from PitchBook revealed that venture funding for crypto-related companies increased to $1.9 billion in the fourth quarter of 2023, marking a 2.5% rise from the previous quarter. This is the first time since March 2022 that venture capital investments in crypto startups have seen a rise. The major crypto ventures securing funding primarily focus on financial and technological solutions, such as tokenizing real-world assets on the blockchain and building decentralized computing infrastructure.
Some notable fundraises in the quarter included Swan Bitcoin and Blockchain.com, which secured $165 million and $100 million, respectively. The most significant deal involved a $225 million investment in Wormhole, an open-source blockchain development platform, which acquired a valuation of $2.5 billion with support from Coinbase Ventures, Jump Trading, and ParaFi Capital.
The report also attributed the increased interest in crypto from financial institutions to the launch of the first spot Bitcoin exchange-traded funds (ETFs) in the United States in January. In the first quarter of 2023, crypto firms secured $2.6 billion in 353 investment rounds, representing an 11% decline in deal value from the previous quarter and a 12.2% decrease in total deals. This marked the lowest capital investment in the space since 2020.
