Blockchain
Cryptocurrency VCs Will Invest $12 Billion Cash Horde Into Blockchain Projects This Year – DL News
- Venture capitalists are keeping an eye on infrastructure investments in the cryptocurrency sector.
- This year’s top deal is a DeFi cloud platform.
- VCs are sitting on a lot of dry powder for promising projects.
Venture capitalists are expected to invest around $12 billion in crypto projects in 2024, according to PitchBook estimates.
While the previous bull market saw VCs back application-level startups like Coinbase, the research company he said supporters will go back to basics this year.
“We haven’t seen any applications get these large investments this cycle,” said Robert Le, crypto analyst at Pitchbook DL News.
Instead, VCs are looking at infrastructure projects – so-called layer 1s – that support all types of cryptographic applications and networks.
Good deal
For example, the largest deal of the first quarter of 2024 went to Together AI, a developer of an open source decentralized cloud platform. In March it filled up $106 million in an early stage led by Salesforce Ventures.
In the first quarter, venture capital investments in cryptocurrencies increased by 40%, reaching $2.4 billion, compared to the previous period.
The focus on infrastructure is one reason Le estimates the sector will raise just 2.4% more this year than the $9.4 billion raised in 2023.
He compared this to infrastructure projects like Amazon Web Services that raise proportionately less money than application-level startups like Uber and Facebook.
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That said, Le said he expects application projects to attract more money as this cycle heats up.
Eric Johansson is DL News’ News editor. Do you have advice? Email to eric@dlnews.com.