Crypto VC Rebounds in Q2 2024: Market Analysis and Insights

Crypto VC Rebounds in Q2 2024: Market Analysis and Insights

Introduction

The cryptocurrency venture capital market continued its rebound in Q2 2024, following a strong Q1 for Bitcoin and liquid cryptos. While markets have cooled slightly, they remain significantly elevated year-over-year. This analysis provides a comprehensive overview of the crypto VC landscape in Q2 2024.

Key Metrics

  • Deal Count: 577 (-4% QoQ)
  • Capital Invested: $3.2 billion (+28% QoQ)
  • Median Deal Size: $3.2 million (+7% QoQ)
  • Median Pre-money Valuation: $37 million (+94% QoQ)

Deal Count & Capital Invested

In Q2 2024, venture capitalists invested $3.194 billion (+28% QoQ) into crypto and blockchain-focused companies across 577 deals (-4% QoQ).

Capital Invested & Bitcoin Price

The correlation between Bitcoin price and capital invested into crypto startups has weakened. Despite Bitcoin’s significant rise year-to-date, venture capital activity has struggled to keep pace.

VC Investment by Stage

  • 78% of capital allocated to early-stage companies
  • 20% to later-stage companies

Valuation & Deal Size

Median pre-money valuation spiked to $37 million in Q2 (+94% QoQ), reaching the highest levels since Q4 2021. Median deal size rose slightly to $3.2 million (+7% QoQ).

Investment by Category

  1. Web3/NFT/DAO/Metaverse/Gaming: 24% ($758 million)
  2. Infrastructure: 15%
  3. Trading: 12%
  4. Layer 1: 12%

Deal Count by Category

  1. Web3: 19%
  2. Infrastructure: 15%
  3. Trading: 11%
  4. DeFi: 9%

Investment by Geographic Location

  • United States: 53% of capital invested (+23.5% QoQ)
  • United Kingdom: 12.78%
  • Singapore: 4.6%
  • UAE: 4.39%

Key Takeaways

  1. Crypto VC sentiment continues to improve, though levels remain below the 2021-2022 bull market.
  2. Web3 and Layer 1s saw notable investment.
  3. Median valuation spiked significantly to the highest since Q4 2021.
  4. Bitcoin L2s continue to see significant investment, up 174% QoQ.
  5. Early-stage deals led the way, capturing nearly 80% of investment capital.
  6. The United States continues to dominate the crypto startup ecosystem.

This analysis provides valuable insights into the current state of the crypto VC market, highlighting key trends and areas of growth in Q2 2024.