Q1 2024 Signals Resurgence in Crypto Venture Capital Funding: Crypto Koryo Report
Summary:
The first quarter of 2024 has seen a resurgence in venture capital (VC) investment in cryptocurrency, ending a two-year dip. The data analytics company Crypto Koryo reported a significant increase in both the amount of funding and the number of funded projects compared to the last quarter of 2023. This growth is largely driven by crypto-centric venture firms, marking a shift from earlier quarters dominated by banks and non-crypto VCs. This upward trend, mirroring patterns in late 2020, suggests the possibility of a new wave of substantial VC investment in the sector.
The first quarter of 2024 saw a promising increase in venture capital (VC) investment in cryptocurrency, marking an end to a two-year downturn. The data analytics firm, Crypto Koryo, featured this rise in a recent report, pointing out that both, the sum of funding and the number of funded projects escalated from the last quarter of 2023. There was a notable surge of 38% in the total capital invested during this period. The graph depicting this increase shows a significant growth in the investment by cryptocurrency-focused venture capital funds.
Furthermore, the number of funded projects rose by 49%, a peak not reached since the final quarter of 2021, portraying an ascendant trend in crypto VC investment. The pattern of this upward shift mirrors that of the fourth quarter of 2020, preceding substantial VC investment in the sector, leading Crypto Koryo to predict the possibility of a new wave of investments in the future.
One distinguishable feature of this quarter is the dominant involvement of cryptocurrency-centric venture firms, unlike previous quarters when non-crypto VC and banks were the leading investors. Major participants in this quarter were crypto-native VC firms like Andreessen Horowitz Crypto, OKX Ventures, Multicoin Capital, Paradigm, and Polychain. In March alone, VC funds in cryptocurrency invested over $1.1 billion in 180 different investments, a monthly increase of 52.5%, with a predominant focus on infrastructure and decentralized finance (DeFi) projects.
This encouraging trend in the first quarter of 2024 is also an extension of the positive momentum observed in the preceding quarter of 2023. In the first quarter of 2023, crypto VC investment had nudged up by 2.5% compared to the third quarter of 2023 - the first discernable increase since March 2022. 2022 was a challenging year for cryptocurrency due to the declining venture capital investment amid adverse market conditions, with the sector registering consecutive quarterly dips in venture capital funding.
Published At
4/5/2024 2:22:51 PM
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