The cryptocurrency industry has experienced a rise in venture capital activity in early 2024, indicating a potential resurgence of investor confidence after a period of decline. According to data from Chainalysis’ “The 2024 Crypto Spring Report,” the first quarter of 2024 saw an increase in crypto investments compared to the previous quarter, which may signify a shift in the investment landscape within the industry.
In 2023, there was a significant decrease in capital raised by cryptocurrency companies, coinciding with the crypto winter that began in 2022. After reaching close to $10 billion in the fourth quarter of 2022, quarterly funding volumes dropped below $2.0 billion in the second quarter of 2023.
However, in the first quarter of 2024, there was a slight uptick in crypto venture capital volumes, marking the first positive movement since 2022 and reaching around $2.5 billion. The median deal size also recovered from a sharp decline in the fourth quarter of 2022, consistently staying around $10 million.
Despite the overall decline in venture capital activity in the crypto industry in 2023, there were several significant deals worth over $100 million. These deals included early-stage investments that took place in the third quarter of 2023 and continued into the first quarter of 2024. Notably, the blockchain interoperability project Wormhole and the Decentralized Physical Infrastructure Network (DePIN) called Together.ai secured the largest deals, raising $225 million each at valuations of $2.5 billion.
Other major deals highlighted by Chainalysis include the crypto asset management and taxes platform Swan Bitcoin, which received a $165 million investment in late 2023, and the major cryptocurrency exchange service Blockchain.com, which secured $110 million funding in November 2023. Totter, an open-source cloud storage platform, and the Ethereum protocol EigenLayer also secured significant venture capital deals, raising $101 million and $100 million, respectively.
The increase in crypto venture capital deals coincides with the significant surge in the cryptocurrency market in early 2024. Bitcoin (BTC) reached new all-time highs of $73,600 in mid-March, primarily attributed to the launch of spot Bitcoin exchange-traded funds in the United States in January 2024.