The crypto market experienced a surge in fundraising, reaching $2.4 billion in the first quarter of 2024, driven by a shift in market sentiment and fresh inflows. This increase in investment activity within the cryptocurrency sector compared to the previous quarter was due to a bull market witnessed during Q1, which enticed institutional investors to pour money into the market following the Securities and Exchange Commission’s approval of spot Bitcoin ETFs. Venture capital funds actively participated in this bullish run, with a total of 518 deals amounting to $2.3 billion being closed in the first quarter of the year, reflecting a 40.3% increase in investments compared to the previous quarter. Deal volume also saw a notable rise of 44.7% in the preceding quarter.
As asset values increased, market valuations soared throughout the year, setting the stage for a promising investment climate. Noteworthy examples of successful fundraising within the cryptocurrency market include Zama, a crypto firm specializing in fully homomorphic encryption (FHE), which secured $73 million in funding, EigenLayer, which received $100 million in Series B funding, and Together AI, which raised $106 million, propelling its valuation to an impressive $1.1 billion. With more institutions venturing into the cryptocurrency sector, a multitude of deals are driving increased valuations for various companies. The experts at PitchBook anticipate continued growth in investment activity throughout the remainder of the year.
For the second month in a row, crypto venture capital funding has exceeded the $1 billion mark, highlighting continued investor interest in the industry. April witnessed $1.02 billion in funding spread across 161 investment rounds, slightly down from March’s $1.09 billion across 186 rounds. This marks the first time since October-November 2022 that the crypto sector has seen two consecutive months of funding surpassing $1 billion. Balance, a digital asset custodian based in Canada, revealed that it has once again achieved $2 billion in assets under custody (AUC) amid the recent recovery in crypto markets. KODA, the largest institutional crypto custody service in South Korea, has also seen remarkable growth in crypto assets under its custody, with the value of these assets expanding by nearly 248% in the second half of 2023.
Overall, the surge in investment activity within the cryptocurrency market during the first quarter of 2024 was driven by a significant increase in fundraising, reaching $2.4 billion. This surge was fueled by a shift in market sentiment and fresh inflows, with venture capital funds actively participating in the bullish run. Noteworthy examples of successful fundraising include Zama, EigenLayer, and Together AI, with the latter raising $106 million and propelling its valuation to $1.1 billion. Additionally, for the second month in a row, crypto venture capital funding has exceeded $1 billion, highlighting continued investor interest in the industry. Balance and KODA have both experienced growth in assets under custody, reflecting the overall positive trend in the cryptocurrency market. The experts at PitchBook anticipate continued growth in investment activity throughout the remainder of the year.
