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<p>Crypto venture capital funding saw a sliding trajectory even through the last quarter of 2023. Despite Bitcoin prices soaring during the period, investment in the crypto space took a fall. <a rel="noopener noreferrer nofollow" href="https://www.bloomberg.com/news/articles/2024-03-26/crypto-venture-capital-funds-under-pressure-to-produce-returns" target="_blank">Bloomberg</a> in its report highlights that the main reason behind the fall could be crypto venture capitalists not falling prey to the hype around the Bitcoin boom.</p>
<h2 id="galaxy-digital-highlight-fall-of-crypto-venture-capital-investments">&nbsp;Galaxy Digital Highlight Fall of Crypto Venture Capital Investments</h2>
<p>In its latest report, <a rel="noopener noreferrer nofollow" href="https://www.galaxy.com/insights/research/2023-crypto-vc-seeks-a-bottom/" target="_blank">Galaxy Digital</a> states that even though 2023 was a historic year for cryptocurrencies as BTC increased by over 160% and ETH by 90%, venture capital investment in cryptocurrency fell dramatically from 2022’s record-breaking year. Allocator demand for exposure was further diminished by multiple high-profile blowups of venture-backed cryptocurrency industry startups while tightening monetary policy raised the cost of capital and decreased venture allocations overall. In the end, 2023 concluded the year with a little over half of the agreements representing only one-third of the crypto venture capital investment that occurred in each of the previous two years.</p>
<p><strong>Read Also: <a href="https://coingape.com/uk-endorses-firm-collaboration-on-tokenization-strategy/" target="_blank" rel="noopener noreferrer nofollow">UK Endorses Firm Collaboration on Tokenization Strategy</a></strong></p>
<h2 id="crypto-venture-capital-investments-tumble-to-20-billion">Crypto Venture Capital Investments Tumble to $20 Billion</h2>
<p>Bloomberg further highlights that from $38 billion in 2022 and more than $20 billion the year before, fundraising fell to $5.8 billion last year. The numbers demonstrate the importance of starting capital as well. By the end of 2023, venture capital firms focused on cryptocurrency had over $72 billion in assets under management, which accounted for more than half of all digital asset portfolios.</p>
<p>Startups developing Trading, Exchange, Investing, and Lending enterprises raised the most venture capital money (27% of the total) for the fourth consecutive quarter. For the first time, Wormhole’s $225 million fundraising effort led the Layer 2 &amp; Interoperability category to raise the second-most capital (16%). With 12% of the cash raised, Web3 secured the third place. At approximately 3% of the total cash raised, the new AI category remained stable.</p>
<p><strong>Read Also: <a href="https://coingape.com/us-treasury-flags-13-russian-firms-for-crypto-use-to-evade-sanctions/" target="_blank" rel="noopener noreferrer nofollow">US Treasury Flags 13 Russian Firms For Crypto Use To Evade Sanctions</a></strong></p>
<p>The post <a href="https://coingape.com/crypto-based-venture-capital-investments-fall-despite-the-bull-run/" rel="noopener noreferrer nofollow">Crypto-Based Venture Capital Investments Fall Despite the Bull Run</a> appeared first on <a href="https://coingape.com" rel="noopener noreferrer nofollow">CoinGape</a>.</p>

Crypto-Based Venture Capital Investments Fall Despite the Bull Run

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