Crypto venture capital funding surges to $2.4 billion in Q1 2024

Crypto funding on the rise: Venture capital funding for cryptocurrency ventures experienced a notable resurgence in the initial quarter of 2024, reaching $2.4 billion, marking a promising uptick in investor interest.

After reaching its pinnacle at $11.1 billion in Q1 2022, crypto venture capital flows saw a prolonged downturn, enduring seven consecutive quarters of decline. This downward trend bottomed out at $1.7 billion in the last quarter of 2023, according to data from PitchBook.

Room for crypto innovation

Robert Le, a senior analyst at PitchBook, stressed the nascent stage of the crypto industry, highlighting substantial room for growth and innovation. He expressed optimism regarding the trajectory of investments throughout the year, foreseeing continued increases in volume and pace, barring significant market downturns.

The explosive growth witnessed in 2020 and 2021, propelled by low interest rates and heightened risk tolerance, was tempered by a string of high-profile bankruptcies in 2022. These events, including the collapse of major crypto firms, instilled caution amongst investors and triggered a significant drop in bitcoin's price.

Investment setbacks

Instances such as investors facing complete write-offs of their investments in US exchange FTX and widespread disruption due to withdrawal halts on various crypto platforms left many individuals financially impacted.

However, the field has seen a shift over the past year, with some investors growing more sanguine towards crypto. Regulatory approval in the United States for exchange-traded funds linked to bitcoin's spot price in early 2024 provided a boost to confidence.

Bitcoin itself has shown resilience, rebounding steadily from its lows in 2022 to reach a new all-time high of $73,803.25 in March 2024, though its subsequent trajectory has been less certain.

(With Reuters Inputs)