Despite a decline in deal volume, crypto startups saw a slight uptick in venture capital funding during the second quarter of 2024. According to Pitchbook, total investment rose by 2.5% compared to Q1, even as the number of deals dropped by 12.5%. This suggests a growing confidence among institutional investors in the crypto market.
Infrastructure projects dominated Q2 funding, accounting for a combined $685 million in investments. Layer-1 platform Monad secured $225 million in Series A funding, while DeFi protocol BeraChain and Bitcoin restaking platform Babylon raised $100 million and $70 million, respectively. Additionally, decentralized social media protocol Farcaster and blockchain gaming platform Zentry raised substantial amounts in their funding rounds.
However, the overall crypto funding landscape remains significantly below the peak levels of 2021 and 2022. While the industry has attracted $10.1 billion in 2023 and is on track for a similar figure this year, these numbers pale in comparison to the previous boom.
The competitive landscape for crypto startups has also shifted. Early-stage funding rounds are becoming increasingly competitive, while later-stage deals are less so. This suggests a maturing market with a growing focus on established projects.
Major venture capital firms continue to show interest in the crypto space. Pantera Capital and Paradigm recently announced plans to raise $1 billion and $850 million, respectively, for new crypto funds. These investments underscore the long-term potential of the cryptocurrency industry.
