Galaxy Digital’s second quarter venture capital report is released
According to Japanese media "CoinPost", the American crypto asset investment company Galaxy Digital recently released a venture capital market report for cryptocurrency and blockchain companies in the second quarter of 2024 (April to June).
The report noted that cryptocurrency venture capital (VC) investment appetite is still picking up, continuing the trend observed in Q1 (January to March). Although the number of investments was 577, which was lower than the 603 in the first quarter, the amount of investment increased to US$3.2 billion (approximately NT$104.8 billion).
However, current investment volumes are still low compared to the bull market of 2021-2022. Galaxy Digital further stated:
“While Bitcoin ($BTC) and Ethereum ($ETH) prices have increased by approximately 50% since the beginning of the year, and investment volume has increased by 28% from the previous quarter, the number of investments has remained almost flat.”
However, if this trend continues until the end of this year, 2024 will become the third-largest year in terms of venture capital investment and number of transactions in the currency circle, second only to the bull markets of 2021 and 2022.
Source: Galaxy Digital Investment Market Report on Cryptocurrency and Blockchain Enterprises
Web3, Layer 1, Bitcoin Layer 2 attracts the most money
From the perspective of investment track types, venture capital particularly prefers Web3 and first-layer public chain (Layer 1) projects. However, the Web3 track defined by Galaxy Digital is broader: NFT (non-fungible token), DAO (decentralized autonomous organization), metaverse, blockchain games and other fields are included.
During the second quarter, the Web3 track accounted for 24% of total VC investment, raising approximately $750 million. Among them, Farcaster ($150 million) and "Zentry" ($140 million) have the highest investment amounts.
Farcaster is a Web3 community platform, and "Zentry" is a blockchain MMORPG game.
In addition to Web3 and Layer1, Galaxy Digital also pointed out that the Bitcoin Layer 2 project also attracted a large amount of investment, raising $94.6 million in the second quarter, an increase of 174% compared to the first quarter.
Galaxy Digital said investor expectations for the introduction of projects such as DeFi (decentralized finance) and NFTs into the Bitcoin ecosystem remain high. According to the agency’s survey, there are currently at least 65 projects claiming to be Bitcoin Layer 2.
Source: Galaxy Digital Investment Market Report on Cryptocurrency and Blockchain Enterprises
Geographical distribution of venture capital in the currency circle in the second quarter
Judging from the geographical location of investment, more than 40% of venture capital cases in the second quarter involved companies headquartered in the United States, while the distribution in other countries and regions is as follows: 10% in the United Kingdom, 8.7% in Singapore, and 8.7% in the United Arab Emirates (UAE). )3.13%, Hong Kong 2.78%.
Galaxy Digital said the United States still leads the cryptocurrency startup ecosystem, but some companies may have to relocate operations overseas due to regulatory headwinds.
The agency finally pointed out that in order for the United States to become a center for technological and financial innovation in the long term, policymakers need to be aware of the impact of their actions on the cryptocurrency and blockchain ecosystem.
Coinbase once criticized the United States for being too slow
"Crypto City" previously reported that Coinbase, a US-listed exchange, pointed out in a report that the world's top 500 companies and small and medium-sized enterprises are rapidly embracing blockchain technology. However, the United States may be falling behind China in seizing the opportunities of new technologies.
Since 2020, China has surpassed the United States in the number of Fortune 500 headquarters, currently leading 142 to 136. However, the core issue holding back U.S. companies is not regulation but a shortage of blockchain talent, with only 26% of cryptocurrency developers based in the United States.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice. The above opinions and data are for reference only. Users should consider whether any opinions, views or conclusions in this article are consistent with their specific circumstances. Invest accordingly and do so at your own risk.
