Q1 2024 Crypto VC Funding Soars to $2.4 Billion, Signaling Market Revival

The crypto industry experienced a remarkable resurgence in Q1 2024, with venture capital investments soaring to $2.4 billion, according to PitchBook.

This surge represents a significant 40.3% increase from the $1.9 billion recorded in Q4 2023, alongside a 44.7% rise in deal volume.

Q1 2024 Crypto VC Funding Skyrockets

Following a prolonged decline since the peak of $11.1 billion in Q1 2022, the current upturn demonstrates the market’s resilience and growth potential. It’s also worth noting that the projects led in funding came from various sectors.

Crypto VC deal activity. Source: PitchBook

Notable deals in Q1 2024 included $106 million raised by Together AI, a decentralized cloud platform, and $100 million secured by Ethereum restaking protocol EigenLayer. Additionally, fully homomorphic encryption (FHE) platform Zama garnered $73 million.

Key Investment Trends and Highlights

The rise in valuations indicates a competitive investment environment. The median pre-money valuation for pre-seed and seed stages was $21.8 million, early-stage valuations averaged $72 million, and late-stage valuations were $51.1 million. Early-stage deals saw a particularly significant year-over-year increase of 148.3%.

Legal victories for Ripple and Grayscale, positive sentiment around DeFi on Solana, and approval of Bitcoin ETFs in the US fueled the resurgence in venture capital investment. Moreover, investors remain optimistic despite regulatory scrutiny and new regulations for stablecoins and staking services in the UK.

Read more: How To Make Money With Crypto: Top 4 Ways In 2024

Tom Schmidt, a partner at Dragonfly Capital, likened the current market to “boiling water, heating up rapidly”, while David Nage of Arca noted the increased pace of deals compared to the lows of 2023.

Robert Le, a senior analyst at PitchBook, emphasizes that the crypto industry is fertile ground for growth and innovation.

“The crypto industry is still in its early stages, and there is much room for growth and innovation. Barring any major market downturns, we expect the volume and pace of investments to continue increasing throughout the year,” said Le.

Q1 2024 has demonstrated a marked resurgence in venture capital investment in cryptocurrency companies. However, regulatory challenges and market volatility remain critical considerations as the year progresses.