Venture capital (VC) investments in crypto companies are reportedly rising after a slump of seven consecutive quarters.
Citing data from information provider PitchBook, private equity and venture capital deals, Reuters reports that venture capital investments in crypto companies rose 41% quarter-on-quarter to $2.4 billion in the first three months of 2024.
According to the report, this is still a fraction of the $11.1 billion that venture capital firms pumped into crypto companies in the first quarter of 2022. Since then, crypto VC investments have witnessed consecutive quarterly declines until the first quarter of this year.
At the time of the peak in venture capital investment in the crypto sector, Bitcoin (BTC) was trading below its then all-time high of just over $69,000, reached in November 2021. It happened months before the implosion of Terra (LUNA). ) and about a year before the collapse of the now defunct crypto exchange FTX. Bitcoin hit a low of around $15,500 in November 2022 and has since recorded a new all-time high of around $73,800.
Bitcoin is trading at $70,871 at the time of writing.
As for what to expect in the coming months, the report quotes PitchBook senior analyst Robert Le:
“The crypto industry is still in its early stages and there is a lot of room for growth and innovation. Barring major market declines, we expect the volume and pace of investment to continue to increase throughout the year.”
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