New findings from Galaxy Research, a crypto insights firm, reveal that venture capitalists have injected billions of dollars into the digital assets industry in the first quarter of this year.
According to a recent article by Galaxy Research, venture capitalists invested $2.49 billion in cryptocurrencies during Q1 2024, marking a 29% increase compared to the previous quarter.
The analytics platform suggests that the significant investments made in Q1 2024 indicate that the market may have hit its lowest point in Q4 2023.
“In Q1 2024, venture capitalists invested $2.49 billion (+29% QoQ) into companies focused on crypto and blockchain across 603 deals (+68% QoQ). This is the first increase in both capital invested and deal count in three quarters, which could suggest that Q4 2023 was the ‘bottom’ of the market. However, sustained QoQ growth and a more substantial increase would confirm this trend in the coming quarters.”
Source: Galaxy Research
Galaxy Research further notes that while venture capitalist investments in the crypto space have historically followed the price of Bitcoin (BTC), the recent surge in Bitcoin’s value in 2024 has caused a decoupling.
“While venture capital investment in the crypto sector has typically been correlated with the price of Bitcoin, this correlation has broken down over the past year. Bitcoin has seen significant growth since January 2023, while VC activity has mostly stagnated. Q1 2024 witnessed a significant increase in BTC, and although capital invested also rose, it is still far from the levels seen when Bitcoin last traded above $60,000. This disparity can be attributed to both industry-specific factors within the crypto market (such as Bitcoin exchange-traded funds, new developments like restaking and modularity, and Bitcoin layer-2s) and wider economic influences (such as interest rates).”
Source: Galaxy Research
At the time of writing, Bitcoin is trading at $62,754, reflecting a 5.2% increase in the past 24 hours.
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