Key Takeaways:
Venture capitalists’ Investments in cryptocurrency-related projects have topped $1 billion for the second consecutive month this year. This marks the first time since October and November 2022 that the industry has recorded two straight months of fundraising above a billion dollars.
VC Firms Raised $1.02 Billion to Support Crypto Projects in April
According to RootData, In April, the crypto sector received $1.02 billion in funding from across 161 investment rounds led by various venture capital firms. However, this number is a minor dip from the $1.09 billion recorded from 186 rounds in March.
This month’s most notable VC funding involved asset management giant BlackRock, who led a $47 million investment round into Securitize – a real-world asset tokenization project. Meanwhile, crypto venture capitalists Paradigm and Coinbase led the charts with a massive $225 million raised for Monad, a newly launched Layer-1 blockchain deemed the “Solana killer”.
Blockchain infrastructure firms have received the most venture capital funding so far this year, at $1.7 billion. Decentralized finance (DeFi) protocols came in second place at $626 million. Whereas, decentralized autonomous organizations (DAOs) that manage crypto projects were the least funded of the lot, having received just $3 million so far in 2024.
Non-fungible token (NFT) projects have slid way down the pyramid as interest and demand for digital collectibles are at an all-time low. NFT-related VC funding rounds collected just $281.3 million in 2023, a whopping 92% drop from the $3.4 billion the sector raised in 2022.
Just for the record, in April, blockchain infrastructure startup Auradine and Cosmos-based L1 Berachain received $80 million and $100 million, respectively, in VC funding.
As per data from DefiLlama, since 2014, over $100 billion in funding has flowed into the blockchain sector across 5,195 funding rounds.
Crypto Venture Capitalists Going Big to Attract More Mainstream Investment into the Niche Market
The positive momentum in fundraising also comes as leading VC firms Pantera Capital and Paradigm are seeking $1 billion and $850 million for their cryptocurrency-related funds. Panthera’s $1 billion fund would be the largest the crypto market will have ever raised since May 2022, when Silicon Valley-based venture capitalist Andreessen Horowitz (a16z) raised a record-breaking $4.5 billion for its crypto investment fund.
Panthera’s fund, slated for an April 2025 launch, will serve as the company’s ‘all-in-one fund’ that is set to offer investors exposure to a “full spectrum” of blockchain-based assets and will be different from its existing offerings such as the Liquid Token Fund, Early Stage Token Fund, Bitcoin Fund and Venture Funds, which focus on a specific investment.
A16z continues to be a major player in the VC business and revealed that it has already raised $7.2 billion to invest in several technology-related sectors in May, which includes artificial intelligence and gaming. However, the company has decided not to top up its cryptocurrency-focused fund.
Crypto Fundraising Miles Off the Peak From 2021 and 2022
Despite the recent uptick, venture capital funding in crypto-related projects is miles off the highs experienced in 2021 and 2022, when the industry saw a respective of $31.2 billion and $27.3 billion raised.
In 2024, the industry has collectively raised $3.5 billion from across 604 funding rounds. Experts say that if the current trend continues, this year’s funding spree is on track to surpass the $9.3 billion raised in 2023, and that too by a considerable margin.
2023 was the least exciting year for VC investments in crypto projects following the collapse of various industry giants during the previous year, such as trading platform FTX and lending protocol Voyager, and the subsequent bear market the event caused. Fundraising sunk to a record low of $445 million in October 2023, the lowest figure since December 2020.
However, things are looking bright for the industry as the last three months have recorded consecutive monthly increases in VC fundraising in the range of at least a billion dollars.
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