After a prolonged downturn, venture capital (VC) investment in cryptocurrency firms is experiencing a resurgence.
Rise in VC Funding
According to data from PitchBook, VC investment in crypto companies surged by 41% in the first quarter of 2024, reaching $2.4 billion. This marks a significant turnaround from the seven consecutive quarters of decline.
Market Context
The previous peak in VC investment occurred in Q1 2022, when Bitcoin was trading near its all-time high. However, the market downturn triggered by the Terra (LUNA) collapse and FTX bankruptcy led to a sharp decline in investment.
Bitcoin’s Role
Bitcoin’s recent recovery to $70,871 has contributed to the renewed interest in crypto investments.
Future Outlook
PitchBook analyst Robert Le anticipates continued growth in VC investment: “The crypto industry is still in its early stages, with ample room for growth and innovation. We expect investment volume and pace to increase throughout the year.”
