Crypto venture capital funding fell by 20% to $2.4 billion in Q3 2024, primarily driven by a ‘barbell market’ where Bitcoin and high-risk memecoins dominated investor attention, leading to mid-tier projects being overlooked. During this quarter, the number of deals also decreased by 17%, totaling 478. While there was a slight increase compared to Q3 2023's $2 billion funding, the overall interest from large allocators remains ‘minimal’. According to Galaxy Digital's report, typical crypto investments are gravitating towards large market cap cryptocurrencies and speculative tokens, ignoring mid-sized utility projects. This trend is attributed to weak interest in crypto venture capital, and the correlation between Bitcoin’s price and VC funding appears to have weakened. Early-stage deals captured 85% of total capital investment, predominantly from crypto exchanges and layer 1 blockchain companies. Despite the current stagnation, Galaxy predicts that VC funding may accelerate in Q4 and early 2025 amid falling interest rates and potential regulatory relaxation.

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