**Crypto VC Investment Reaches $3.2B in Q2, Defying Market Lull: Galaxy Digital**
**Ruholamin Haqshanas**
**Last updated: July 3, 2024, 10:06 EDT | 2 min read**
Venture capitalists are maintaining their interest in the crypto sector, defying the overall market slowdown, according to a recent report from Galaxy Digital. In the second quarter of the year, crypto startups successfully raised $3.2 billion, reflecting a 28% increase from the $2.5 billion secured in the previous quarter.
Although this amount is still far from the nearly $10 billion invested in crypto projects during the same period in 2022, the report highlights that “crypto venture capital sentiment continues to improve.” This resurgence in venture capital interest in the crypto industry corresponds with an earlier observed trend this year, which followed the rise in crypto prices. Despite Bitcoin reaching an all-time high in March, crypto venture capitalists have not entirely mirrored the broader market’s enthusiasm, especially as Silicon Valley remains heavily focused on AI developments.
**Web3 Projects Attract Significant Funding**
Within the $3.2 billion invested in the crypto sector, a significant share was allocated to web3 projects. Startups engaged in web3, decentralized autonomous organizations (DAOs), the metaverse, and gaming received 24% of the VC capital, totaling $758 million. The most substantial raise in this category was the $150 million secured by Farcaster, a social media protocol.
Layer 1 projects and Bitcoin layer 2 solutions also drew considerable capital, as reported by Galaxy Digital. Monad Labs, which aims to create a faster version of Ethereum compatible with Ethereum’s coding language, raised $225 million, marking the largest funding round of the quarter. Additionally, Berachain, a layer 1 project, secured $100 million at a valuation of $1.5 billion, according to Bloomberg. Interest in Bitcoin layer 2 solutions, designed to facilitate more efficient transaction processing on the Bitcoin blockchain, also saw significant growth.
Overall, the report recorded a total of 577 crypto deals in the second quarter, with early-stage investments making up nearly 80% of total funding.
**Crypto Startup Funding Surpasses $100 Billion**
Over the past decade, crypto startups have seen a remarkable surge in funding, surpassing the $100 billion milestone since May 2014. The peak of cryptocurrency startup funding occurred in October 2021, with over $7 billion raised in that month. The second-highest recorded funding was in February 2022, totaling $3.67 billion.
Recent research shows that nearly half of all cryptocurrency funding comes from investors in the United States. Other significant contributions come from the United Kingdom, accounting for 7.7%, and Singapore at 5.7%, based on figures from the second quarter of 2023. Notably, several high-profile funding deals have occurred between late 2023 and the first half of 2024. Together.AI and cross-chain protocol Wormhole secured investments of $225 million each, while open-source cloud storage firm Totter and Eigenlayer raised $101 million and $100 million, respectively. Other notable funding rounds include Swan Bitcoin’s $165 million raise and Blockchain.com’s $110 million.
These substantial investments underscore the continued confidence and interest in the cryptocurrency industry.
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