The crypto world saw a slight increase in venture capital (VC) funding during the second quarter of 2024, but the number of deals actually went down.
Funding Up, Deals Down
Crypto startups received $2.7 billion in VC funding during the quarter, a 2.5% increase from the previous quarter. However, this represents a nearly 10% drop compared to the same period last year. The number of deals also fell by 12.5% from the first quarter.
Challenges After the Boom
The crypto market faced some headwinds after a strong start to the year. Bitcoin exchange-traded funds (ETFs) saw a huge drop in investor interest, with inflows falling by 80% in the second quarter. This slowdown in the market likely contributed to the decrease in deal activity.
Shifting Focus
Despite the challenges, some analysts are optimistic about future fundraising. They point to potential improvements in token prices and increased institutional adoption. Investors are also showing a preference for infrastructure projects over consumer applications.
Consolidation Continues
The second quarter saw a significant increase in exit activity, with 26 exits reported. This suggests that consolidation is happening in the crypto space, particularly among exchanges and infrastructure providers.
