In 2024, venture capital invested approximately $13.7 billion in cryptocurrency and blockchain startups.
Article author: Yogita Khatri
Source: The Block
Article translated by: Ada, MetaEra
According to The Block Pro data, in 2024, venture capital invested approximately $13.7 billion in cryptocurrency and blockchain startups, a 28% increase from $10.7 billion in 2023. However, this figure is still far lower than $33.3 billion in 2022 and $29 billion in 2021.
"Relative to 2023, Bitcoin has risen more than 150% this year, but the pace of venture capital hasn't accelerated significantly, which is surprising," said Rob Hadick, general partner at Dragonfly. "I speculate that this may be due to the limited partner (LP) market still being relatively sluggish, and most venture capital firms lack confidence in seriously deploying remaining funds until they raise new capital (or at least are confident they can raise new capital)."
Will Nuelle, general partner at Galaxy Ventures, expressed a similar view, stating that while the funding growth in 2024 is encouraging, it appears relatively modest compared to the overall market recovery.
Meanwhile, Ed Roman, co-founder and managing partner of Hack VC, said that this growth meets his expectations. 'The election results won't be announced until the end of the year, so their ripple effects have yet to manifest,' he said.
Key engine of growth
Several venture capitalists stated that this year's bullish crypto market, optimistic regulatory attitudes, institutional reserves, and new narratives such as the integration of cryptocurrency and artificial intelligence drove the increase in funding for 2024.
Lauren Stephanian, general partner at Pantera Capital, said: 'When cryptocurrency prices rise and market sentiment is high, funds and angel investors tend to invest more freely, and more talented founders enter the space.'
Alex Odagiu, investment director at Binance Labs, attributed the growth in investments to this year's market rebound. He stated that milestone events such as the approval of Bitcoin spot ETFs have confirmed cryptocurrency as an asset class, attracting institutional capital and accelerating capital inflows. Odagiu added that the U.S. government under Trump has a friendly attitude towards cryptocurrency, suggesting that this upward momentum will continue.
Kyle Samani, co-founder and managing partner at Multicoin Capital, also expressed optimism about the political environment. He stated, 'We've never had a president or Congress that supports cryptocurrency, but that will change starting in 2025.' He added, 'We remain optimistic that they will prioritize issues related to cryptocurrency and promote more innovation through clear rules to help maintain the development of the cryptocurrency industry domestically.'
A bountiful year for early investments
In 2024, early-stage funding dominated. According to The Block Pro data, pre-seed round transactions reached a record of over 1,180 (a year-on-year increase of 68%), highlighting strong interest in emerging projects. Despite a decrease in overall inflow, total seed-stage funding still reached $3.4 billion, close to the $3.8 billion in 2021. Series A funding exceeded 175 transactions (a year-on-year increase of 59%), raising $2.8 billion (a year-on-year increase of 46%). Meanwhile, late-stage funding decreased, paving the way for mergers and acquisitions (M&A).
Hot areas
According to The Block Pro data, the infrastructure sector led cryptocurrency venture capital in 2024, with over 610 transactions and a total investment of about $5.5 billion—a 57% year-on-year increase, making it the highest record for the sector to date. Infrastructure investments are primarily focused on scaling blockchain networks to enhance speed, reduce costs, and improve scalability, with particular attention to Layer-2 solutions for Bitcoin and other blockchains. Modular technologies, including data availability, shared sequencers, and rollups-as-a-service, attracted significant funding. Liquid staking protocols and developer tools also remain hot investment areas.
NFT and gaming startups raised a total of $2.5 billion in 2024, slightly above $2.2 billion in 2023. Although funding remains stable, on-chain metrics indicate that activity in the NFT market is declining with the rise of trends like memecoins. Nonetheless, NFTs and gaming remain key areas, with over 610 transactions completed, indicating that the market is maturing compared to the peak of 936 transactions in 2022.
Funding for enterprise blockchain has significantly declined, dropping from $536 million in 2023 to $164 million in 2024, a year-on-year decrease of 69%. Enterprise applications that once centered their narrative around 'blockchain, not Bitcoin' have lost investor interest, shifting focus to more scalable blockchain use cases.
Web3 has shown resilience, raising $3.3 billion over the past two years, close to the $3.4 billion raised during 2021 to 2022. Emerging areas such as SocialFi, crypto-AI, and decentralized physical infrastructure networks (DePINs) have driven this growth. In particular, DePIN, as a rapidly growing vertical, completed over 260 transactions and raised approximately $1 billion.
Decentralized finance (DeFi) saw a strong recovery in 2024, with more than 530 transactions, an 85% year-on-year increase, compared to 287 transactions in 2023. Bitcoin-based DeFi applications, such as stablecoins, lending protocols, and perpetual swaps, drove this growth. Layer-2 networks and non-custodial payments, including cross-chain liquidity and stablecoins, also contributed to its momentum.
Looking ahead
Top cryptocurrency venture capitalists hold a cautiously optimistic outlook for 2025. While funding levels are not expected to return to the highs of 2021-2022, they unanimously agree that startups with high product-market fit and user adoption are most likely to receive capital support over the next year.
