In the first quarter of 2024, the cryptocurrency market began a remarkable upward trajectory, with a total market capitalization approaching $3 trillion. By the first quarter, the market had experienced a significant rally above the 2021 peak price, rewarding investors and holders for years of patience. The introduction of spot Bitcoin ETF trading and a significant increase in investment inflows further expanded adoption by institutional investors. As a result, it has gained mainstream acceptance around the world and the cryptocurrency funding ecosystem is growing exponentially.
Cryptocurrency funding reached $2.3 billion in the first quarter
In the first quarter of 2024, venture capital (VC) investments in the crypto space increased significantly, reversing a two-year downward trend. According to on-chain data, the number of VC-funded projects has been increasing since the fourth quarter of 2023. However, the data highlights a nearly $800 million decrease in investment this quarter compared to the fourth quarter of 2023.
The number of funded projects surged by more than 40%, reaching a level not seen since the fourth quarter of 2023. This indicates that venture capital funding in the crypto sector is on an upward trajectory.
The recovery in funding comes after a tough 2023 for the crypto market, which saw venture capital investment drop significantly during the “crypto winter.” Throughout this period, startups have struggled to raise capital, with average quarterly investments down 80% from peak levels in 2021 and 2022.
For example, crypto companies raised just $1.3 billion in funding in the first quarter of 2023, down significantly from $8 billion a year earlier. However, total investment in the first quarter of 2024 was nearly $2.3 billion, a slight increase from 2023.
Monthly breakdown: Investment amount in March was $1 billion
Funding for crypto companies began to surge in January and gradually increased following the SEC's approval of the Spot Bitcoin ETF and large inflows into the ETF. By March, investments had exceeded $1 billion. Below is a monthly breakdown of funding in the cryptocurrency sector.
| Month | Amount raised | Fundraising activities |
| January | $595.61 million | 122 |
| February | $660.96 million | 132 |
| march | $1.05 billion | 168 |
In contrast to the previous quarter, which was dominated by banks and non-crypto venture capitalists, this quarter saw an increase in investment activity from crypto-focused venture companies, with OKX Ventures leading the chart. It is worth noting that there is.
Trade with active investors
Crypto-native venture capital firms such as OKX Ventures, Animoca Brands, MH Ventures, and DWF Labs led investment activity in the first quarter. In March alone, these crypto VC funds deployed over $1 billion in 168 investment rounds. Venture capital funding in the crypto sector recorded a significant 59% month-on-month increase in March, with funds primarily going to infrastructure and decentralized finance projects.
| fund | Information of sale |
| OKX Ventures | 31 |
| Animoka brand | twenty three |
| MH Ventures | 18 |
| DWF Lab | 18 |
| Cogitent Ventures | 18 |
| water drip capital | 17 |
| Foresight Ventures | 17 |
| Binance Lab | 16 |
| big brain holdings | 16 |
| delphi digital | 16 |
| polychain capital | 15 |
| amber group | 15 |
| Cipher Capital | 15 |
| spartan group | 15 |
trending categories
The graph below reveals not only the most active investors, but also the sectors each fund considers to be a priority. OKX Ventures, Binance Labs, and DWF Labs showed high interest in his DeFi investment, while Animoca Brands and MH Ventures showed more interest in his GamFi and blockchain services.
Blockchain services and DeFi projects attract the majority of investments from the most active players in the space, but only a few companies are eyeing GameFi as a strategic investment target. This move to GameFi will enable rapid adoption and construction of an interactive entertainment ecosystem. It's a strategy we've seen prominently with investors like Animoca Brands.
In the first three months of 2024, the funding landscape was heavily influenced by DeFi, accounting for an overwhelming 25% share of total investments. Meanwhile, venture capital attention for blockchain services has declined, and it now accounts for only 18% of total funding.
Recently, DeFi projects have taken the lead following a huge interest in the cryptocurrency sector. In particular, projects related to Ethereum and Solana are predominant.
Monthly funding: DeFi secures 112 funding rounds
A closer look at this category each month shows that DeFi projects maintain a stronger funding position. They lead the charts with 112 funding rounds. DeFi projects secured approximately $382 million in funding, and blockchain services secured a total of $370 million in funding.
On the other hand, NFT efforts are showing the opposite trend. They rank last in the most funded category on a monthly basis and are noted to have infrequent fundraising events. Data shows that NFT projects have secured just 15 funding rounds, suggesting that market interest is on the decline.
In addition, there were 100 investment rounds in the range of $3 million to $10 million, accounting for approximately 37% of the total investment of $2.31 billion.
A significant number of projects currently have secured small amounts of funding. Almost 70% of all public investment rounds fall within the $1 million to $10 million range. This trend suggests that investors are taking a cautious approach to putting large sums of money into crypto startups, and the sentiment remains the most significant funding activity in Q1 2024. reflected in the top 6.
US tops the list with $785 million in funding
The United States has taken the lead in raising funds for cryptocurrencies, occupying the top position among investment destinations. It has generated nearly $785 million in profits for crypto ventures, representing about 34% of total global investment. Meanwhile, Hong Kong followed suit, securing second place in the crypto funding tier with a total investment of $124 million.
In terms of funding sources, the US holds the top spot in donations to crypto projects, with 881 initiatives receiving US funding, an increase of 57% sequentially.
US-based VCs are particularly fond of DeFi projects, accounting for 27% of their total investment portfolios.
Blockchain Games: Decrease in Funds
Data collected by DappRadar revealed that the sector received $288 million in funding in the first quarter. This is a 57% decrease from the fourth quarter of 2023. Meanwhile, Gunzilla Games successfully raised his $30 million for the upcoming free-to-play battle royale game Off the Grid. The fundraising effort, jointly led by CoinFund and Avalanche's Blizzard Fund, aims to accelerate the game's expansion to various gaming platforms, including Sony PlayStation, Microsoft's Xbox, and PC.
Reduced funding could slow down this innovation, leading to fewer new titles and updates, which in turn could impact player retention and appeal. Additionally, reductions in financial support could make our marketing and community outreach less effective and limit the exposure of new games to potential players.
