2024 Cryptocurrency Venture Capital Panorama Review: Infrastructure Projects Active, Fundraising Weak

The crypto market experienced significant growth in 2024, mainly benefiting from key events such as the launch of a spot Bitcoin ETF in January and the pro-crypto U.S. political elections in November. The market capitalization of liquid cryptocurrencies surged by $1.6 trillion ( up 88% ) year-on-year, reaching $3.4 trillion at the end of the year. Bitcoin's market capitalization grew by almost $1 trillion to nearly $2 trillion, accounting for 62% of the total gains. The Memecoin and AI token boom has also boosted the market, especially on Solana.

! Panorama review of crypto venture capital in 2024: active infrastructure project financing, weak fund fundraising

Despite the market recovery, crypto VCs still face challenges. Mainstream trends such as Bitcoin, memecoin, and AI tokens have limited investment opportunities. The once-popular DeFi, gaming, metaverse and NFT sectors have not attracted a lot of new capital. Mature infrastructure companies face increased competition from traditional financial institutions. Emerging trends such as stablecoins, tokenization, DeFi-TradFi integration, and crypto AI crossover are still in their infancy. Macro pressures such as high interest rates have hindered high-risk allocation, and synthetic VCs are mostly far away from crypto.

According to the data, venture capitalists will invest $3.5 billion in crypto startups in Q4 2024, an increase of 46% month-on-month, but the number of transactions will decrease by 13% to 416. The total investment for the year was $11.5 billion, with 2,153 transactions. Annual crypto investment is expected to exceed $18 billion in 2025, but it is still below 2021-2022 levels. Future innovation priorities include the institutionalization of Bitcoin, the rise of stablecoins, and the advancement of DeFi-TradFi regulation.

Historically, the price of Bitcoin has been highly correlated with the volume of crypto venture capital, but the correlation has weakened since January 2023. Bitcoin hit new highs, while venture capital activity failed to keep up. Possible reasons include institutional investors' hesitation due to regulatory uncertainty, a bias in the market narrative towards Bitcoin, and a broader downturn in the venture capital market.

In 2024, infrastructure-led crypto venture capital attracted more than 610 deals and $5.5 billion in financing, up 57% year-on-year. Highlights include L2 scaling, modular technology, liquid staking, and development tools. NFTs and games raised $2.5 billion, slightly higher than last year. Web3 raised $3.3 billion, close to the levels of the previous two years, with new trends such as SocialFi, crypto AI, and DePIN driving growth. DeFi is recovering strongly, with more than 530 financings, up 85% year-on-year, and Bitcoin DeFi is the key driver.

! Panorama review of crypto venture capital in 2024: active infrastructure project financing, weak fund fundraising

Early-stage financing accounted for 60% of total investment, and late-stage financing accounted for 40%, up significantly from 15% in Q3. Animoca Brands leads the way with more than 100 investments, followed by OKX Ventures, Cogigent Ventures and others. Active angel investors include Polygon founders Sandeep Nailwal, Paul Taylor and DCF God, among others.

! Panoramic review of crypto venture capital in 2024: active infrastructure project financing, weak fund fundraising

In 2024, venture capital fund fundraising fell to a six-year low, with 865 funds totaling US$104.7 billion, down 18% year-on-year. Crypto venture capital financing remains under pressure due to macroeconomic and market volatility. Seventy-nine new funds raised $5.1 billion, the lowest since 2020. The median and average fund sizes fell to their lowest level since 2017, reflecting tighter funding conditions.

! Panorama Review of Crypto Venture Capital in 2024: Infrastructure Project Financing is Active, Fund Raising is Weak

Medium-sized funds (1-500 million ) trend is obvious, and large funds (10 more than 100 million US dollars ) due to deployment difficulties and valuation risks will not appear in 2023-2024. Well-known funds such as Pantera Capital and Standard Crypto remain active, expanding their reach. The largest closed-end fund in 2024 is Paradigm's Fund III.

Notable investments include Monad( high-performance L1), Farcaster( decentralized social network ), Berachain( Proof-of-Liquidity Consensus ), Story Protocol(IP Management ), 0G Labs(AI - Blockchain integration ), etc. Key trends include AI integration, Bitcoin DeFi, and dedicated blockchains.

Overall, crypto VCs are cautiously optimistic in 2024, with fundraising activity rebounding and institutional interest growing. The shift to mid-cap funds and the dominance of emerging funds indicate that the industry is maturing. Despite the decline in short-term venture capital, the continued focus on early-stage projects and emerging trends such as AI integration highlight the resilience and potential growth drivers of the ecosystem.

! Panorama Review of Crypto Venture Capital in 2024: Infrastructure Project Financing is Active, Fund Fundraising is Weak