Crypto venture capital activity has been subdued for the last two years despite an overall rally in digital assets, according to a report by Galaxy Digital. The total capital allocated to crypto-focused VC funds in 2024 was $11.5 billion, a decrease from 2023 figures. The report highlighted a shift in large investors favoring spot bitcoin ETFs for market exposure instead of early-stage VC investments. The stagnation in the VC market is attributed to a preference for bitcoin and new spot ETFs, while funding new projects, particularly memecoins, remains challenging. Nonetheless, there is optimism around AI and crypto projects, and potential regulatory changes that could enhance opportunities in decentralized finance (DeFi). The U.S. led in VC deals and funding in the last quarter of 2024, with early-stage investments making up 60% of total capital allocated. Despite a 46% increase in Q4, the overall crypto VC landscape continues to lag behind previous bull markets.

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