According to figures released on Monday, global venture capital investment in cryptocurrency firms reached $2.4 billion in the first three months of 2024, suggesting that investor interest may be reviving.
According to data, venture capital flows related to cryptocurrencies peaked at $11.1 billion in the first quarter of 2022 and then declined for seven consecutive quarters, ending with barely $1.7 billion in the last quarter of 2023.
Robert Le, a senior analyst at PitchBook, stated in a research that the cryptocurrency market is still in its infancy and has plenty of potential for development and innovation.
We anticipate that the number and pace of investments will keep rising throughout the year, he continued, barring any significant market downturns.
The crypto business saw tremendous expansion in 2020 and 2021 due to a combination of low interest rates and a high appetite for risk. However, in 2022, a number of prominent crypto firms filed for bankruptcy, which alarmed investors and caused the price of bitcoin to fall.
Millions of people lost money when different cryptocurrency platforms stopped permitting withdrawals, and investors who had backed the U.S. exchange FTX were forced to write down their investments to zero.
The approval of exchange-traded funds that monitor the spot price of bitcoin by U.S. regulators at the beginning of 2024 has contributed to an increase in investor confidence in cryptocurrencies over the past year.
Since then, it has struggled to find direction, but Bitcoin has gradually rebounded from the lows of 2022, reaching a new all-time high of $73,803.25, in March.
