TLDR:
- Crypto VC funding surged to $3.2 billion in the second quarter, a 28% increase from the first quarter.
- Venture capitalists are investing in web3 projects, layer 1s, and Bitcoin layer 2s.
According to a report by Galaxy Digital, crypto VC funding has seen a significant increase, reaching $3.2 billion in the second quarter, a 28% rise from the first quarter. This surge indicates a growing sentiment among investors towards the crypto market. The report highlighted that investors predominantly focused on web3 projects, DAOs, decentralised autonomous organisations, the metaverse, and gaming, with $758 million being invested in this category. Farcaster, a social media protocol, raised $150 million, making it the largest round in this segment.
Layer 1s and Bitcoin layer 2s also garnered attention from investors, with Monad Labs raising $225 million to build a faster version of Ethereum compatible with Ethereum’s coding language. Berachain, another layer 1, raised $100 million at a valuation of $1.5 billion. Moreover, Bitcoin layer 2s, aimed at processing transactions more efficiently, raised nearly $95 million in the second quarter, a 174% increase from the first quarter.
The report also revealed that there were a total of 577 crypto deals in the second quarter, with early-stage deals securing almost 80% of total funding. This trend indicates continued investor interest and support for early-stage crypto projects. The surge in crypto VC funding suggests a positive sentiment towards the market, despite not reaching the levels seen during bull rallies in previous years. Investors are diversifying their portfolios and spreading their investments across various sectors within the crypto market.
