According to Galaxy Digital, venture capitalists invested close to $3.2 billion in the cryptocurrency market during the second quarter of this year.
The digital asset venture capital market rebound that started in the first quarter persisted through April, May, and June, according to a recent report by researchers at the crypto business.
The number of deals fell [quarter over quarter], from 603 in Q1 to 577 in Q2, although capital spent increased from $2.5 billion to $3.2 billion in Q2. The median pre-money value jumped sharply from $19 million to $37 million, almost all-time highs, while the median deal size grew marginally from $3 million to $3.2 million. This indicates that the recent upsurge in the cryptocurrency market over the past several quarters is creating intense competition and a fear of missing out (FOMO) among investors, despite the fact there is less accessible investment capital than at previous peaks.
The Grayscale researchers observe that, in comparison to Bitcoin’s (BTC) prior phase of trading above $60,000 in 2021–2022, total venture capital interest in the industry remains low.
Consequently, the researchers observe a decreasing relationship between the price of Bitcoin and investments made in cryptocurrency firms.
This significant gap has been caused by crypto-native catalysts like Bitcoin ETFs and developing fields like restaking, modularity, and Bitcoin L2s, as well as pressures from regulatory issues, bankruptcies of crypto startups, and macroeconomic headwinds (rates). Because of the rebound in liquid cryptocurrency, allocators might be getting ready to make a serious comeback, which might mean more venture capital activity in the second half of the year.
