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Venture capital (VC) investment within the cryptocurrency sector has seen a significant rise in the first quarter of 2024, marking the end of a two-year decline.
According to data compiled by the crypto analysis platform Crypto Koryo, both the total capital invested and the number of projects receiving VC funding have experienced considerable growth since Q4 2023.
The figures indicate a striking 38% increase in funds allocated during the quarter, reflecting a resurgence of investor confidence in the cryptocurrency market.
Additionally, there has been an impressive 49% rise in the number of projects obtaining funding, a level not observed since Q4 2021.
More Crypto Investments to Come
Crypto Koryo suggests that this positive trend in the crypto sector may signal the onset of a new investment wave.
The analysis platform draws comparisons between the recent increase and trends noted in Q4 2020, which preceded a substantial surge in VC investments in the cryptocurrency field.
This quarter has also seen heightened interest from venture firms focused on crypto, contrasting with earlier periods dominated by banks and non-crypto VCs.
Noteworthy crypto-native VCs such as Andreessen Horowitz Crypto, OKX Ventures, Multicoin Capital, Paradigm, and Polychain have emerged as key contributors to the funds invested during this quarter.
Long-term Trend
Both total investments and number of investments have increased compared to last quarter.
Compared to last quarter, there was a 38% increase in amount invested and 49% increase in the number of projects invested. pic.twitter.com/QhIcsOB0qw
— Crypto Koryo (@CryptoKoryo) April 4, 2024
In March alone, crypto VC funds invested over $1.1 billion across 180 transactions.
This represents a remarkable 52.5% month-on-month growth in VC funding for cryptocurrency projects, particularly emphasizing infrastructure and decentralized finance.
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The increase in funding during Q1 2024 follows the positive trend observed in Q4 2023.
In comparison to Q3 2023, Q4 2023 saw a 2.5% rise in crypto VC investments, marking the first increase in VC funding for cryptocurrency projects since March 2022.
The cryptocurrency sector encountered a difficult year in 2022, with a downturn in venture capital funding coinciding with subdued market conditions.
Throughout that year, venture capital investments in the industry faced consecutive quarterly declines.
Crypto Funds See a Surge in Assets
Earlier this year, Balance, a Canadian digital asset custodian, announced that it has once again reached $2 billion in assets under custody (AUC) amid the recent recovery in cryptocurrency markets.
Similarly, Korea Digital Asset (KODA), the largest institutional crypto custody service in South Korea, has experienced significant growth in crypto assets under its management.
Recently, the company disclosed that the value of these crypto assets under its custody increased by nearly 248% in the latter half of 2023.
KODA, established through a partnership between major Korean bank KB Bank, crypto venture capital firm Hashed, and blockchain technology company Haechi Labs, reported that the value of these assets reached approximately 8 trillion Korean won ($6 billion) by the end of last year.
This marks a considerable rise from the 2.3 trillion won recorded at the close of June 2023.
According to analysts at Bernstein Research, crypto funds could potentially reach an astonishing $500 billion to $650 billion within the next five years, a significant increase from the current valuation of around $50 billion.
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