Private equity firms (VC) have once again shown great interest in crypto and the blockchain space, as evidenced by the massive $3.5 billion investment in Q4 2024, an increase of 46% over the previous quarter eat This increase in funding, spread over 416 exchanges, shows the growing confidence in blockchain technology despite the turbulent history of the sector in the past few years.
Be Main
- Increase in Investments: $3.5 billion was invested in Q4 2024, marking a 46% increase from Q3 2024.
- Market Recovery: This is the highest level of VC funding since Q4 2022, following a challenging post-FTX period.
- American rule: The US remains the largest recipient of VC funding, but its share has decreased.
- Increased Investment Focus: Increased interest in bitcoin exchange-traded products (ETPs).
A Strong Quarter for Crypto Investment
According to the latest report by Galaxy Research, the investment in Q4 2024 marked the highest level of VC funding in the crypto and blockchain space since Q4 2022. This increase is following a difficult period after FTX, where the crypto market fell into a slump. and see bitcoin (BTC) fall below $17,000 in December 2022. However, the market is starting to recover, and it seems that the interest of the active VC has been received.
Despite the recovery, 2024 remained the weakest year for crypto VC funding since 2020, with 79 new funds raising only $5.1 billion. This is a big difference to the gray VC environment of 2021-2022, where investments were poured into crypto startups. The report by Galaxy Research indicates that although the market activity is increasing, the introduction of new funds has increased, and the amount of funds received has decreased significantly. The total amount and average income in 2024 fell to their lowest levels since 2017.
US Venture Capital Investment Dominates, but Faces Challenges
According to global investment trends, the US continues to be the largest recipient of capital investment in the crypto sector, receiving 46.2% of all VC investments in 2024. , reflecting the growing influence of other regions such as Hong Kong and the United Kingdom in the crypto ecosystem.
While the US continues to lead, Galaxy Research expects the US share of venture capital funds to rebound in the sector as it recovers. from former US President Donald Trump to the White House. This expectation is linked to the belief that a change in leadership may lead to better governance policies for the sector.
Moving on to Bitcoin Exchange-Traded Products (ETPs)
An interesting trend highlighted in the report is the growing focus on bitcoin exchange-traded products (ETPs). This change shows that investors are increasing exposure to the crypto sector through large, liquid vehicles, rather than startups. This may indicate a more conservative approach to crypto investments, with specific players looking for stable and regulated vehicles to gain exposure to the market.
Looking Ahead: Investment Trends and Global Dynamics
As 2024 approaches, crypto and blockchain have found themselves in an interesting position. As investments grow in the space, investors are also choosing larger, more liquid vehicles over cash. hire fast. With the worldwide interest in blockchain technology, we can see many strong changes in the regional distribution of VC funding, especially as markets continue to evolve and new regulations are established.
For the crypto industry, the future remains uncertain but filled with opportunities. As more investors dip their toes back into the space, the sector’s growth could accelerate, if it continues. stability will return, both to the market and its regulatory environment.
With the return of VC funding and the growth of international locations such as Hong Kong and the United Kingdom, the future of blockchain innovation may look different from the landscape of the past few years.
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