Crypto Venture Capital Investment Hits 32 Billion in Q2 Defying Market Slump Galaxy Digital

Crypto VC Investment Surges to $3.2B in Q2, Defying Market Downturn: Galaxy Digital


By Ruholamin Haqshanas
Last updated:
July 3, 2024, 10:06 EDT
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2 min read


Despite a market lull, venture capitalists are maintaining their interest in the crypto sector, as revealed in a recent report by Galaxy Digital.
In the second quarter of this year, crypto startups managed to secure an impressive $3.2 billion in funding, representing a 28% increase from the previous quarter’s $2.5 billion.
While this figure is still far from the nearly $10 billion invested in crypto projects in the second quarter of 2022, the report indicates a positive shift in sentiment regarding crypto venture capital.
The renewed interest in venture capital for the crypto industry follows a trend observed earlier in the year, coinciding with the rise in crypto prices. However, despite Bitcoin reaching an all-time high in March, crypto venture capitalists have not matched the broader market’s enthusiasm, particularly with Silicon Valley’s focus on AI-related developments.
A Significant Portion of Funding Allocated to Web3 Projects
Within the $3.2 billion invested in the crypto sector, a notable portion went to web3 projects. This includes decentralized autonomous organizations (DAOs), the metaverse, and gaming, which captured 24% of the VC capital, amounting to $758 million.
Among these projects, Farcaster, a social media protocol, secured the largest raise in this category, amounting to $150 million.
Layer 1 projects and Bitcoin layer 2 solutions also attracted substantial capital, according to Galaxy Digital. Monad Labs, with the aim of building a faster version of Ethereum compatible with Ethereum’s coding language, raised $225 million, marking the largest funding round of the quarter.
Additionally, Berachain, a layer 1 project, secured $100 million at a valuation of $1.5 billion.
Investor interest in Bitcoin layer 2 solutions, aimed at facilitating more efficient transaction processing on top of the Bitcoin blockchain, also experienced significant growth.
Overall, the report highlighted a total of 577 crypto deals in the second quarter, with early-stage investments accounting for nearly 80% of total funding.
Crypto Startup Funding Surpasses $100 Billion
Since May 2014, crypto startups have seen a substantial surge in funding, surpassing the significant milestone of $100 billion. The peak of cryptocurrency startup funding was reached in October 2021, with over $7 billion raised during that month.
The second-highest recorded funding occurred in February 2022, totaling $3.67 billion.
Recent research indicates that nearly half of all cryptocurrency funding originates from investors in the United States, with the remaining investments distributed among various countries, including the United Kingdom and Singapore.
Notable funding deals between late 2023 and the first half of 2024 include investments of $225 million each for Together.AI and cross-chain protocol Wormhole, as well as open-source cloud storage firm Totter and Eigenlayer raising $101 million and $100 million, respectively.
Other significant funding rounds include Swan Bitcoin’s $165 million raise and Blockchain.com’s $110 million.
These substantial investments underscore the continued confidence and interest in the cryptocurrency industry.
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