Crypto VC Market 'Tepid' as Q3 Investments Declined 20%, Says Galaxy Digital

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Tom Carreras is a markets reporter for CoinDesk. He holds BTC, ETH and SOL above CoinDesk's disclosure threshold of $1,000.

Crypto VCs invested $2.4 billion in the third quarter of 2024, a 20% drop compared to the third quarter.Trump Pumps DeFi Token Sale; Bitcoin Price Jumps Above $65Kreport

With $8 billion invested over the course of the year's first three quarters, the industry is on course to barely get more funding in 2024 than it received in 2023. Those numbers are a far cry from the deals that crypto reaped in 2021 and 2022, when the industry saw more than $30 billion across 3,000 deals each year.

The reasons for that lack of interest? High interest rates have made venture funds less attractive, Thorn said, and spot bitcoinexchange-traded funds offer new avenues to gain exposure to crypto. Not to mention that the industry’s various collapses in 2022 are still fresh in everyone’s minds. But the ETF-driven market surge is “leading to increased competition among surviving crypto VCs for deal flow and putting entrepreneurs in the driver's seat when it comes to valuation,” Thorn added.The majority of capital went to early stage firms – meaning to startups that are still developing their product and business model. They received 85% of capital investment, whereas later-stage companies, which generally already have a well-known product and brand, only received 15% of capital.

 

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