Original title: (2024 Changes in Cryptocurrency Investment and Financing: Decoupling of Primary and Secondary Markets, VC Projects Losing Dominance)
Original author: Fu He, Odaily Planet Daily
In 2024, the investment and financing heat in the cryptocurrency sector is decoupling from the overall market trend, with VC coins no longer dominating market performance.
On a macro level, the cryptocurrency market in 2024 has welcomed many historic moments, such as the launch of Bitcoin spot ETFs, the launch of Ethereum spot ETFs, clarity in regulatory policies from various countries, the Federal Reserve's announcement of interest rate cuts, and Trump's impending return to the White House, among other positive macro influences, leading Bitcoin to successfully break through the important threshold of $100,000.
From within the cryptocurrency market, memes have become a key focus, with different types of memes at different times serving as boosters for market increases. VC projects are performing poorly, and the linear release cycle of tokens has become a chronic 'poison' for VC projects.
Under the influence of various factors, the primary market financing has seen a significant increase in quantity, but the financing amounts are more cautious.
Looking back at the investment and financing activities in the primary market in 2024, Odaily Planet Daily found:
● In 2024, the primary market had 1,295 financing cases, with a disclosed total financing amount of $9.346 billion.
● The AI sector shines, with a surge in financing in Q4 2024.
● The largest single investment amount is $525 million for Praxis.
Note: Odaily Planet Daily classified all projects disclosed in Q1 financing (the actual closing time is often earlier than the announcement) into five major sectors based on various dimensions such as business type, service targets, and business models: infrastructure, applications, technology service providers, financial service providers, and other service providers. Each sector is further divided into different sub-sectors including GameFi, DeFi, NFT, payments, wallets, DAO, Layer 1, cross-chain, and others.
2024 belongs to BTC and meme coins.
An overview of the financing situation in the primary market over the past three years leads to an important conclusion: The investment and financing activities in the primary market in 2024 have gradually decoupled from the overall trends of the cryptocurrency market, with market trends primarily dominated by Bitcoin and meme sectors, while traditional VC projects are performing poorly and are unlikely to become the core driving force of the market.
From data analysis, 2022 marked the peak of the previous cryptocurrency market cycle, with primary market financing activities being highly active, and the changes in number and amount almost synchronized with market trends. In the first quarter of 2022, the number of financing cases reached 562, with amounts as high as $12.677 billion. However, as the market entered a downward cycle, financing activities rapidly contracted, with only 330 cases left by the fourth quarter, and the amount dropping to $3.375 billion.
The year 2023 continued the bear market effect, with financing activities in the primary market and the overall market also performing poorly. The number and amount of financing continuously declined throughout the year, dropping to 232 cases and $1.725 billion in the third quarter, marking the lowest point in nearly three years. During this period, the primary market was clearly affected by the overall market trend, with market sentiment and capital activity being suppressed.
2024 became an important turning point for investment and financing activities in the primary market. Data shows that the number of financing cases rebounded significantly, with the first quarter reaching 411 cases, an increase of nearly 69% compared to the fourth quarter of 2023. However, in contrast to the rebound in the number of financing cases, the financing amounts remained cautious, with the total quarterly financing amount hovering between $1.8 billion and $2.8 billion throughout the year. This indicates that while capital activity has somewhat recovered, investors are more conservative in their funding commitments, further indicating the decoupling characteristic of the primary market from the overall market.
From the perspective of market heat distribution, the cryptocurrency market in 2024 is dominated by Bitcoin and meme sectors, contrasting sharply with the performance of the previous cycle. In the last cycle, VC projects were usually at the core of market hotspots, while in 2024, VC projects overall performed poorly, struggling to have a substantial impact on the market. This phenomenon has caused the primary market trends to lose their value as reference indicators for overall market trends.
The primary market in 2024 shows a trend of rationalization and independence. After experiencing the frenzy of 2022 and the winter of 2023, investors are clearly more cautious and focus more on the actual quality and long-term value of projects rather than blindly chasing market hotspots. This change may indicate that the primary market is gradually detaching from the traditional cryptocurrency market cycle and entering a new development stage.
The increase in the number of financing cases and the cautious amounts reflect that VC institutions are more inclined to diversify investments and are more conservative in capital allocation. This attitude indicates that the return of market heat has not led to large-scale capital inflow, but rather prompted investors to pay more attention to projects with real potential. In other words, the primary market is no longer just a 'follower' of market trends, but is beginning to play a role in shaping the future market landscape.
In 2024, the primary market had 1,295 financing cases, with a disclosed total financing amount of $9.346 billion.
According to incomplete statistics from Odaily Planet Daily, there were a total of 1,295 financing events in the global cryptocurrency market in 2024 (excluding fund raising and mergers), with a disclosed total amount of $9.346 billion, distributed across infrastructure, technology service providers, financial service providers, applications, and other service providers. Among these, the application sector received the most financing, with a total of 606 cases; the infrastructure sector received the most financing amount, totaling $3.976 billion. Both sectors lead others in terms of financing amount and number.
From the above chart, the application sector, as the area most closely connected to end users in the cryptocurrency industry, has always been a focal point of the primary market. In 2024, the financing performance of the application sector achieved double growth compared to 2023, with financing numbers and amounts increasing by about 20% year-on-year.
The financing performance of the infrastructure sector in 2024 is particularly striking. Both the number and amount of financing saw significant increases compared to 2023, with an increase of over 50%. This growth is driven not only by the continuous upgrade demand for underlying facilities in the cryptocurrency industry but also by the rise of emerging fields such as AI (artificial intelligence) and DePIN (decentralized physical infrastructure network), bringing new development opportunities for the infrastructure sector.
Overall, the investment and financing activities in the global cryptocurrency market in 2024 show distinct characteristics, with the application and infrastructure sectors leading in both quantity and amount, indicating a dual demand from the market for end user experience and underlying technology upgrades. At the same time, the technology service providers, financial service providers, and other service providers are brewing new opportunities in stable development, especially the financial service provider sector, which is expected to usher in new breakthroughs in 2025 with the entry of mainstream finance.
The AI sector shines, with a surge in financing numbers in Q4 2024.
According to incomplete statistics from Odaily Planet Daily, in 2024, financing events in the segmented tracks concentrated in DeFi, underlying infrastructure, and gaming, with the DeFi sector having 289 cases, the underlying infrastructure sector having 236 cases, and the GameFi sector having 160 cases.
From the distribution of financing situations in sub-sectors:
Throughout the segmented tracks of 2024, the DeFi and underlying infrastructure sectors continued to maintain stable growth, with both total financing amount and number ranking first. This indicates that the market’s demand for decentralized finance and underlying technology remains strong, whether it is the innovative new protocols in DeFi or the continuous optimization of underlying facilities such as multi-chain interoperability and blockchain security, all becoming focal points for capital.
In contrast, the gaming sector performed impressively in the first three quarters, consistently ranking among the top three in terms of financing numbers, but faced a significant decline in the fourth quarter, with only 29 projects disclosing financing information. This trend reflects a phase of reduced heat for GameFi, with a more cautious market attitude towards its short-term profitability and user growth prospects.
Meanwhile, the heat of the AI sector has rapidly risen, becoming a major highlight of 2024. This sector initially developed alongside other fields (such as DeFi and infrastructure) and was not separately classified. However, starting in the third quarter, the AI sector gradually stood out, especially in the fourth quarter, where financing numbers and amounts doubled. The market has shown high attention to the application potential of AI + blockchain, and the rise of AI Agents has further ignited capital enthusiasm for this sector.
The largest single investment amount is $525 million for Praxis.
From the top 10 financing amounts in 2024, it can be seen that despite fluctuations in the market environment, investment institutions still have strong confidence in infrastructure projects. Almost all of the top ten projects focus on underlying technology and innovation directions, demonstrating institutions' high expectations for the future development of these sectors.
L1 public chains continue to attract large-scale financing. In the list, besides the established public chain Avalanche completing $250 million in private placement financing, emerging projects like Monad, Berachain, and Babylon also showed strong growth momentum. These projects have captured investors' attention through technological innovation and ecological expansion.
Praxis is the financing champion on this list, having secured up to $525 million in investment. However, the specific development direction of the project remains relatively unclear, primarily because it is managed in a DAO organizational format, and entry into the DAO requires an application, which restricts the disclosure of related information.
It is noteworthy that Paradigm's dominant position in the list is evident. As a top venture capital institution, Paradigm led the three major projects on the list—Monad, Farcaster, and Babylon.
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