Crypto Startups Secure $2.7B in VC Funding Despite Market Challenges
During the second quarter of 2024, crypto startups secured $2.7 billion in venture capital (VC) funding, according to data from PitchBook.
This figure, reported by Bloomberg, marks a 2.5% increase from the previous quarter but nearly a 10% decrease compared to the same period last year. Despite the rise in funding, deal activity dropped by 12.5% from Q1.
The digital asset market has faced significant hurdles following earlier highs spurred by the launch of Bitcoin exchange-traded funds (ETFs) in the US. Bloomberg estimates that investor inflows into these ETFs fell by 80% in Q2.
Rob Hadick, a partner at Dragonfly crypto venture fund, commented, “VC investment in crypto peaked in March and April, but activity slowed as the broader market turned negative in late April and May.”
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Despite these challenges, some analysts remain hopeful about future fundraising prospects, pointing to potential increases in token prices and greater institutional adoption. Jason Kam, founder of Folius Ventures, noted, “The rise in project valuations reflects founders trying to capitalize on a more optimistic secondary market.”
Investment continues to be directed mainly at infrastructure projects, with VCs showing more caution towards consumer applications. Only one significant funding round for a crypto application was recorded in Q2, indicating a shift towards infrastructure-based investments.
Exit activity, however, surged to its highest level since early 2022, with 26 exits reported, signaling ongoing consolidation among crypto exchanges and infrastructure providers.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
