Cryptocurrency investment reaches 18-month high due to increase in early-stage transactions
Funding for cryptocurrency companies hit an 18-month high in March, thanks to a surge in early-stage investment in blockchain-related ventures.
According to The Block Deals Dashboard, new funding for cryptocurrency companies totaled more than $1.4 billion. This makes March the best month since September 2022, when the sector raised more than $2 billion.
March was a landmark month because of the surge in early-stage, or Series A, investments, according to John Dantoni, director of The Block Research. There were more than 20 early-stage investments during the month, a significant increase from February, when there were nine, and in line with the monthly average over the past year, according to Dantoni.
Increased funding for the sector has coincided with rising prices. Bitcoin, which began to rise steeply in early February, surpassed $70,000 for the first time this month.
“Despite the optimistic price performance of digital assets, some have wondered why we haven’t seen a similar resurgence in venture funding. This question is valid, but it stems from a misunderstanding about the timing of deal announcements,” Dantoni said. “In reality, most deals do not become public immediately after they occur, creating a natural lag between deal activity and price performance. Venture deals are often finalized for one to two months, sometimes more, before they are officially announced.”
‘More money on the table’
David Garcia, co-founder and managing partner of Borderless Capital, offered a relatively simple assessment of the reasons for the recent increase in new transactions. “There’s more money on the table,” he said. This week, Borderless Capital announced that it had co-led a $15 million investment in DePIN layer 1 blockchain project peaq.
Dantoni said this month’s increase outweighs the high numbers. “March is the most reliable measure of the vitality of VC activity in the market,” he said. “Notably, deal activity continued to increase for the third consecutive month, with venture funding surging approximately 64% month-on-month.”
March’s token sale helped bring in the largest amount of the month. Monad Labs and Optimism, both classified as “infrastructure” deals, raised $213 million and $89 million, respectively, through token deals, according to The Block Deals Dashboard.
The total dollar amount invested in cryptocurrency and blockchain-related companies surpassed $90 billion last month, marking an important milestone. Block Research has been tracking cryptocurrency investments since 2017.
More funding could flow into cryptocurrency projects via venture capitalists in the coming months. For example, on Thursday it was revealed that Marc Andreessen, Accolade Partners and Galaxy Digital had invested in cryptocurrency VC firm 1kx’s latest fund, raising $75 million. 1kx focuses on consumer-facing cryptocurrency applications and has made just under six investments through its latest fund, including Kiln, Pudgy Penguins, Rarible, and The Sandbox.
Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.
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