Venture capital (VC) investment in crypto and blockchain startups rebounded strongly in 2024, hitting $13.6 billion, according to the latest DeFi Report. This represents 4.9% of the total $279 billion invested across all sectors by venture capitalists last year.
A Gradual Recovery for Crypto Investments
The 2024 funding level marks a notable improvement from 2023’s $10.1 billion but still falls far short of the 2021 high of $32.4 billion. Analysts suggest the sector is steadily recovering after a challenging period, fueled by growing confidence in the industry.
Among the key funding milestones in 2024:
- Monad Labs raised $225 million to develop a layer-1 smart contract network.
- Berachain secured $100 million for its modular blockchain development platform.
- The Bitcoin staking protocol Babylon garnered $70 million.
- Tokenization platform Securitize received $47 million in funding, with major backing from BlackRock.
Optimistic Projections for 2025
Looking ahead, venture capital investment in crypto is expected to soar to $18 billion in 2025, according to a forecast by PitchBook. The anticipated growth reflects a broader trend of renewed interest in blockchain technology and cryptocurrency.
Key Drivers Behind the Surge
Industry experts, including analysts from Galaxy Research, point to two major factors driving the surge in crypto VC funding:
- Declining Interest Rates: Lower interest rates are creating a more favorable environment for high-risk, high-reward investments like crypto startups.
- Regulatory Clarity: As governments and regulators implement clearer frameworks for cryptocurrencies, investor confidence is growing.
“Crypto VC fundraising has historically lagged broader crypto market trends, and there will be some amount of ‘catchup’ over the next four quarters,” said Alex Thorn and Gabe Parker of Galaxy Research.
With predictions for $18 billion in funding by 2025, the crypto industry is poised for significant growth. The combination of increased regulatory clarity and improving macroeconomic conditions could catalyze the next wave of blockchain innovation, potentially bringing the industry closer to its 2021 peak.
