The first quarter of 2024 has marked a significant resurgence in venture capital (VC) funding for cryptocurrency-related companies, with $2.8 billion invested across various funding rounds, according to data from AltIndex.com. This figure represents a substantial 255% increase from the previous quarter and is the highest amount since mid-2022.
The recovery in funding comes after a challenging 2023 for the crypto market, which saw VC investments plummet in the wake of the so-called "crypto winter." During the downturn, startups in the sector faced difficulties in raising capital, with average quarterly funding dropping by 80% compared to peak levels in 2021 and 2022. For instance, in the first quarter of 2023, crypto companies raised just $1.3 billion, a stark contrast to the $8 billion reported in the same period the year prior.
The latest data from Crunchbase indicates a renewed confidence among investors, coinciding with a broader market rally that has seen significant price gains for major digital currencies. Shiba Inu and Dogecoin stood out with impressive price increases of 196% and 142%, respectively, by the end of Q1 2024.
The total number of investments also saw a notable rise, more than doubling from the last quarter of 2023 to reach 666 in the first quarter of this year. This level of activity is the second-highest quarterly figure since the third quarter of 2022, which witnessed 702 investments in the sector.
The United States continues to lead in terms of VC funding for crypto companies, accounting for 55% of the total investment value at $41.5 billion. Europe and Asia follow with $14.8 billion and $11.2 billion in VC investments, respectively.
This influx of capital has pushed the cumulative funding amount in the crypto market to $74.8 billion, marking an increase of $7.1 billion from the same quarter a year ago.
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