News
Cryptocurrency Venture Funding Hits $2.4 Billion, PitchBook Finds
By Medha Singh
(Reuters) – Funding for crypto startups rose for a second straight quarter to $2.4 billion in the first three months of 2024, PitchBook data showed, as expectations for lower interest rates and the launch of the first U.S. spot bitcoin ETF whetted investor appetite.
According to data firm PitchBook, the funding was spread across 518 deals and was up 40.3% from the previous quarter. Global venture capital investment fell to its lowest level in nearly five years during the same period.
Investor bets on digital asset startups have also been falling since peaking at more than $10 billion in the first quarter of 2022, hurt by economic concerns and the shutdown of major market players. However, the landmark regulatory approval in the United States of bitcoin spot ETFs, offered by heavyweights BlackRock and Fidelity, has bolstered the legitimacy of the asset class and helped propel bitcoin to a record high of $73,803 in March.
“The recovery in publicly traded tokens and continued rise in institutional adoption will drive increased venture funding,” said PitchBook analyst Robert Le.
Startups focused on building infrastructure for crypto and blockchain technology led the way in funding during the quarter, according to PitchBook.
The largest deal was made by decentralized cloud platform Together AI, which raised $106 million in a seed round led by Salesforce Ventures that valued the company at $1.1 billion.
“Investment rounds have become very competitive, especially in the early stages,” PitchBook’s Le said.
“This phenomenon is compounded by the fact that early-stage deals generate higher valuations than late-stage deals, but… we’ll see if this trend continues in the coming quarters.”
Outflows, however, remain weak. He expects mergers to pick up later this year, particularly among cryptocurrency exchanges, custodians, and infrastructure providers as the market matures. (This article has been republished to capitalize “B” in the title and text from PitchBook)
(Reporting by Medha Singh in Bangalore; Editing by Nivedita Bhattacharjee)