Bitcoin's Continuous Growth Fuels Altcoin Interest and Surges Crypto VC Funding
Summary:
This report covers Bitcoin's third consecutive month of growth, renewed interest in altcoins, and the peak of total market value for all crypto projects, excluding Bitcoin and Ethereum. It also highlights the significant rise in crypto Venture Capital (VC) funding amid global geopolitical unrest and increased interest rates. The findings underline the dominance of Infrastructure and Web3 sectors in VC funding and the surge in Bitcoin-based exchange-traded products. The views expressed are for general informational purposes only.
November marked the third consecutive month of rising values for Bitcoin, triggering an increased interest in other cryptocurrencies (altcoins) that first emerged in October. As a result, the total market capitalization of all crypto ventures excluding Bitcoin and Ethereum has reached a high level that was last seen in August 2022. The likelihood of an extended 'altseason' is still uncertain, however, various industry sectors that remained dormant during the bearish phase are now beginning to show early signs of recovery. The Cointelegraph Research Monthly Trend report for December 2023 provides a comprehensive overview of these rising tendencies. The report includes a variety of topics such as Bitcoin market movements, advancements in decentralized finance (DeFi), crypto stock activities, venture capital transactions, derivatives, updates in the mining sector, and the progress in real-world asset tokenization. A free PDF of the Report can be downloaded from the Cointelegraph Research Terminal.
Infrastructure and Web3 have been at the forefront of the crypto VC funding boom, seen in November. In the midst of global geopolitical instability and increasing interest rates in the European Union and United States, the crypto venture capital (VC) sector saw a substantial increase of funding. Investment inflows reached an amount of 973 million dollars across 93 standalone deals, the largest activity seen since June 2023, a near 40% rise from the previous month. This is a stark contrast to October's performance where only three deals exceeded 20 million dollars. However, in November, five investments individually crossed the 50 million dollar mark. This influx of capital could be due to a mix of positive news sentiment, the recent uptrend in the crypto market, and a temporary pause in interest rate increases by the Federal Reserve.
With the highest number of funding rounds, the infrastructure and Web3 sectors led, recording 37 and 30 rounds correspondingly. Centralized finance (CeFi) raised the second most investment volume this month, pulling in 216.4 million dollars across five deals. This unexpected rise can mainly be attributed to two significant funding events: Blockchain.com secured 110 million dollars in a series E funding round and BC Technology Group's centralized exchange (CEX) OSL raised 90 million dollars. Following closely were the Web3 and decentralized finance (DeFi) sectors securing 160.5 million dollars and 78.4 million dollars respectively. The nonfungible token (NFT) sector ended the list, acquiring a relatively modest sum of 11.5 million dollars across three funding rounds.
VC activities and mild rallies in lesser-known altcoins signal a capital transition towards riskier assets. This trend is expected to aggravate with the potential approval of a spot Bitcoin Exchange-Traded Fund (ETF) in the United States. Leading ETF analysts, James Seyffart and Eric Baluchnas, recently revised their approval probability estimates for Jan. 10 to 90%. This optimism is reflected in the increased institutional interest in Bitcoin-based exchange-traded products. This increasing interest was evidenced by a more than 20% increase in open interest on the Chicago Mercantile Exchange (CME).
Cointelegraph Research team comprises some of the most gifted individuals in the blockchain industry. The team, having a combined experience in traditional finance, business, engineering, technology, and research, aims to provide the most accurate, insightful content available in the market through their latest Investor Insights Report.
The views expressed in this article are solely for informative purposes. They are not designated to provide specific advice or recommendations for any person or any particular security or investment product. Cointelegraph does not advocate for the content of this article nor any product mentioned herein. It's suggested that readers conduct their own research before making any decisions related to any product or company mentioned and bear full responsibility for their actions.
Published At
12/19/2023 8:14:00 PM
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