Crypto Venture Capital Market Remained Difficult in 2024, Galaxy Digital Says

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Crypto task superior (VC) enactment remains beneath the levels seen successful erstwhile bull markets contempt the caller rally successful integer assets, Galaxy Digital (GLXY) said successful probe study connected Wednesday.

Total superior allocated to VC funds successful 2024 was $11.5 billion, little than successful 2023.

Galaxy noted that VC enactment was highly correlated to crypto plus prices successful erstwhile bull runs successful 2017 and 2021, "but for the past 2 years enactment has remained depressed portion cryptos person rallied."

Stagnation successful the task superior marketplace is owed to a fig of reasons.

These see a "barbell market" wherever bitcoin (BTC) and its caller spot exchange-traded funds (ETFs) person taken centre stage, with "marginal nett caller activity" from memecoins, Galaxy said. These memecoins are hard to money and person "questionable longevity."

There is increasing enthusiasm for caller projects astatine the intersection of artificial quality (AI) and crypto, the study said, and forthcoming regulatory changes whitethorn effect successful much opportunities successful stablecoins, decentralized finance (DeFi) and tokenization.

Some ample investors whitethorn beryllium gaining vulnerability to crypto via spot bitcoin ETFs "rather than turning to early-stage VC investing," the study noted.

The U.S. was liable for the astir deals completed successful Q4 and the astir superior invested, Galaxy said.

Early-stage deals accounted for 60% of full concern successful the 4th quarter, and stablecoin companies raised the astir money, Galaxy added.

Venture capitalists enactment $11.5 cardinal successful full into crypto and blockchain focused startups successful 2024. These funds invested $3.5 billion, a 46% emergence quarter-on-quarter, crossed 416 deals successful Q4, the study added.

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