VC blockchain and crypto funding surges in Q4 2023: report
It reached $1.9 billion in the fourth quarter of 2023 — a 2.5% increase from the third quarter — according to a report from PitchBook. For the first time since March 2022, venture capital (VC) investments in crypto startups have grown.
PitchBook highlighted that the major crypto ventures funding is mainly focused on financial and technological solutions. These include tokenizing real-world assets on the blockchain, such as real estate and stocks, and building a decentralized computing infrastructure.
Some notable fundraisers during the quarter included crypto exchanges Swan Bitcoin and Blockchain.com, which raised $165 million and $100 million, respectively.
The quarter's most significant deal included a $225 million investment in Wormhole, an open source blockchain development platform. Backed by Coinbase Ventures, Jump Trading and ParaFi Capital, the company has received a $2.5 billion valuation.
Increased interest in crypto from financial institutions may be due to the debut of Bitcoin exchange-traded funds (ETFs) in the United States in January, according to a Pitchbook report.
In the year In the first quarter of 2023, according to Pitchbook's Q1 Crypto Report, crypto companies raised $2.6 billion in 353 investment rounds. The report showed an 11% decrease from the previous quarter and a 12.2% decrease in total discounts. Additionally, the quarter marked the lowest capital investment in the space since 2020.
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The crypto industry faces challenges in 2022, with market problems reflected in venture capital funding for the blockchain and crypto sectors. Following a peak of $11 billion and 692 deals in the first four months of 2022, VC investment gradually declined in subsequent quarters.
Crypto and blockchain-related VC funding declined in 2022, including the collapse of Terra Ecosystem in May 2022, leading to the bankruptcy of crypto lenders Three Arrows Capital and Celsius.
In the year The fall of FTX in November 2022 increased market volatility, and broader global economic conditions, such as rising interest rates and inflation, contributed to the decline in venture capital investments.
In the year In 2023, the crypto industry has seen a transformation with worldwide adoption stories and major TradFi institutions such as BlackRock entering the crypto space.
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