May 21, 2024: Crypto startup funding has soared for the second consecutive quarter, reaching an impressive $2.4 billion in the first three months of 2024.
PitchBook’s latest data reveals that investor appetite was whetted by expectations of lower interest rates and the highly anticipated debut of the first U.S. bitcoin spot exchange-traded funds (ETFs).
The surge in funding comes after a period of decline in investor bets on digital asset startups. Since the peak of over $10 billion in the first quarter of 2022, economic worries and the shutdown of key market players had dampened enthusiasm.
Crypto Startup: Investor Confidence Soars as Bitcoin ETFs Gain Regulatory Approval
However, the recent regulatory approval of spot bitcoin ETFs by heavyweights BlackRock and Fidelity has breathed new life into the crypto market. Notably, this regulatory milestone catapulted bitcoin to a record high of $73,803 in March.
Crypto startup Funding Poised for Acceleration
PitchBook analyst Robert Le emphasizes the impact of institutional adoption and the recovery in publicly traded tokens on venture capital (VC) funding. “The continued rise in institutional adoption will drive increased VC funding,” Le asserts.
Startups focusing on crypto and blockchain infrastructure led the funding charge during the quarter. Among them, decentralized cloud platform Together AI secured the largest deal—an impressive $106 million in an early-stage round led by Salesforce Ventures. This valuation placed Together AI at an impressive $1.1 billion.
Key Insights about Crypto Startup Funding
- Crypto startup funding reached $2.4 billion in Q1 2024.
- The U.S. regulatory approval of spot bitcoin ETFs boosted investor confidence.
- Together AI secured the largest deal at $106 million.
- Early-stage deals now command higher valuations than late-stage ones.
- Expect increased mergers in the crypto market as it continues to evolve.
However, the landscape remains competitive. “Investment rounds have become highly competitive, especially at the early stages,” notes PitchBook’s Le.
