According to data from Pitchbook, the first quarter of 2024 saw a significant increase in venture capital funding for crypto startups, reaching $2.4 billion. This represents an increase of 40.3% compared to the previous quarter, with investments distributed across 518 deals.

The increase in funding follows the launch of the first US bitcoin spot ETF, which has fueled expectations that interest rates will fall and investors' interest in the sector.

Despite the overall decline in global venture capital investments, which fell to an almost five-year low during the same period, the crypto market has shown resilience. This is a notable shift from the downward trend that began after investments rose above $10 billion in the first quarter of 2022. The industry has faced challenges due to economic concerns and the closure of major market players.

Still, the approval by US regulators of spot bitcoin ETFs, where major firms such as BlackRock (NYSE:BLK) and Fidelity offer these products, has increased the credibility of cryptocurrencies. This regulatory milestone contributed to Bitcoin reaching a new high of $73,803 in March.

An analyst at Pitchbook credits the recovery of public tokens and increased institutional adoption as key drivers of increased venture capital funding in the crypto space. Startups focused on infrastructure for crypto and blockchain technology were at the forefront of funding this quarter.

The largest investment of the quarter was a $106 million early-stage funding round for decentralized cloud platform Together AI, led by Salesforce (NYSE: CRM) Ventures. The deal values ​​Together AI at $1.1 billion. Despite the positive trend in funding, the number of exits such as mergers and acquisitions remained low.