Despite The Market Slowdown, Crypto Startups Are experiencing Increased Venture Capital Funding
The total value of VC investments saw its third consecutive quarterly increase, driven by rising valuations and continued institutional adoption of digital assets.
Despite a challenging market environment, crypto startups managed to raise more venture capital (VC) funding in the second quarter of 2024, although they closed fewer deals compared to earlier periods. VC investment in crypto companies reached $2.7 billion, marking a 2.5% increase from the first quarter but a 9.8% decline from the same period last year. The number of deals, however, dropped by 12.5%, according to a report by Bloomberg.
The overall crypto market faced difficulties after a strong first quarter, particularly with a significant decrease in investor inflows into Bitcoin exchange-traded funds (ETFs). Despite the market downturn, the total value of VC investments saw its third consecutive quarterly increase, driven by rising valuations and continued institutional adoption of digital assets.
Investment in crypto infrastructure projects, such as new blockchains, remained strong, though there was growing interest in consumer-focused applications. Notable deals included a $150 million funding round for social media platform Farcaster and a $20 million seed funding for blockchain startup MegaETH. Exit activities also increased, with 26 exits recorded in the second quarter, signaling ongoing consolidation in the crypto market.
