According to Cointelegraph, the cryptocurrency venture capital landscape experienced a notable shift in 2024, with a significant decline in the number of deals by the fourth quarter. This trend suggests that investors are becoming increasingly selective in their funding allocations. Data from PitchBook's Crypto VC Trends report highlights that the total number of crypto deals in the first quarter of 2024 was 653, but this figure dropped to 351 by the fourth quarter, marking a 46% decrease.
Despite the reduction in deal count, the total investment volume showed signs of recovery in the final quarter of the year. PitchBook's data indicates that crypto venture capital funding amounted to $2.7 billion in the first quarter, followed by declines in the second and third quarters. However, the fourth quarter saw a resurgence, with investment volume reaching $2.6 billion, reflecting a 13% increase from the previous quarter. Analysts from PitchBook noted that while the rebound in funding suggests continued investor interest in established teams and innovative technologies, the ongoing decrease in deal count underscores a growing trend of investor selectivity, a pattern that first emerged in the third quarter.
When examining the annual figures, venture capital activity in 2024 mirrored that of 2023, although both years fell short compared to the record highs of 2022. The Web3 sector emerged as the dominant recipient of venture capital in 2024, encompassing decentralized communities, metaverse and gaming platforms, non-fungible token (NFT) platforms, and AI-integrated crypto projects. In the fourth quarter alone, the Web3 sector attracted over $800 million in venture capital investments, with the AI-friendly city Praxis securing a substantial $525 million funding pledge on October 15.
Throughout 2024, the Web3 sector received a total of $2.1 billion in venture capital across 142 deals, making it the leading sector in terms of investment. Blockchain networks, which include bridges, interoperability solutions, and layer-1 and layer-2 networks, followed with $1.8 billion in 106 deals. Infrastructure and developer tools, encompassing data storage, development platforms, institutional services, and node and validator management, ranked third with $1.7 billion in 125 deals. The access sector, which covers asset management, exchanges, wallets, research, and data tools, secured $1 billion in 70 deals, while decentralized finance attracted $714 million in 80 deals.
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