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Crypto VC deals dropped 46% from Q1 to Q4, but investment value rebounded in Q4, signaling a shift toward selective, high-value projects, according to PitchBook.
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The number of cryptocurrency venture capital deals declined significantly in the fourth quarter of 2024, indicating that investors are becoming more selective in allocating funds.
In PitchBook’s Crypto VC Trends report, the capital market data firm revealed that the total crypto deal count in the first quarter of 2024 was 653. The number of deals had quarterly declines, falling to 351 in Q4, a 46% drop from Q1.
Despite the decline in deal count, total investment volume rebounded in Q4. PitchBook data showed that crypto VC funding totaled $2.7 billion in Q1 before declining in Q2 and Q3. In Q4, investment volume bounced back to $2.6 billion, reflecting a 13% quarter-over-quarter increase. PitchBook analysts wrote:
“While the rebound in funding suggests that investors remain willing to back established teams and differentiated technologies, the continued pullback in deal count highlights growing investor selectivity—a dynamic that first became evident in Q3.”
Looking at the annual numbers, VC activity in 2024 was similar to 2023. Still, both years paled in comparison to 2022, when crypto VC deal count and deal values hit all-time highs.
Crypto venture capital annual deal activity Source: PitchBook
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Web3 dominates VC investments in 2024
The Web3 sector — which includes decentralized communities, metaverse and gaming, non-fungible token (NFT) platforms and AI-integrated crypto projects — was the top recipient of venture capital in 2024.
In Q4 2024, the sector saw more than $800 million in VC investments, with the utopic crypto, artificial intelligence-friendly city Praxis receiving a huge chunk. On Oct. 15, the platform reported that it received a $525 million funding pledge.
Q4 2024 crypto venture capital deal activity by segment. Source: PitchBook
In 2024, the Web3 sector received $2.1 billion in VC investments in 142 deals, the highest of all sectors. Blockchain networks, which include bridges and interoperability solutions, as well as layer-1 and layer-2 networks, were second with $1.8 billion in 106 deals.
Infrastructure and developer tools, including data storage, development platforms, institutional services and node and validator management, were third with $1.7 billion in 125 deals.
The access sector, which includes asset management, exchanges, wallets, research and data tools, received $1 billion in 70 deals, while decentralized finance received $714 million in 80 deals.
Crypto VC deal activity by segment in 2024. Source: PitchBook
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This article first appeared at Cointelegraph.com News
