Venture capitalists increased funding for crypto and blockchain companies by 2.5% in Q4 of last year. The rise in VC investment in the sector is attributed to the launch of spot Bitcoin ETFs in the U.S.
According to a PitchBook report, crypto companies raised $1.9 billion in venture capital in 326 deals in Q4 2023, up 2.5% QoQ.
Venture capital investment in the crypto sector increased for the first time since March 2022. However, compared to the previous year, crypto companies attracted 68.2% less investment, and the number of deals decreased by 48.8%. In 2023, crypto startups raised $9.3 billion in 1,643 deals over the year, while in 2022, venture capitalists invested $29.2 billion in the crypto market in 3,211 deals.
In Q4 2023, investments were mostly received by cryptocurrency companies involved in tokenizing real assets and developing decentralized computing infrastructure. Some of the largest deals in the quarter include:
- Wormhole, a cross-chain bridge for Solana, raised $225 million.
- Cryptocurrency exchange Swan Bitcoin raised $165 million.
- Together AI, an artificial intelligence startup, raised $102.5 million.
PitchBook analysts attribute the increase in investor interest in crypto companies to the entry of TradFi giants like BlackRock into the crypto market. In January 2024, spot Bitcoin ETFs were launched in the United States, the hype around which began at the end of 2023.
