Cryptocurrency venture capital firms expect a positive turn in the financing environment for 2024, following a difficult 2023 with a 68% decrease in total investments to $10.6 billion.
Cryptocurrency Companies Hopeful for 2024
The crypto funding industry faced significant challenges in 2023 and witnessed a significant decline in total investments compared to the previous year.
Factors contributing to this decline included historically high interest rates, the growing influence of artificial intelligence, regulatory pressures, and the aftermath of significant crashes involving FTX, Celsius, and BlockFi.
Despite the challenges of the previous year, top crypto venture capital firms are expressing optimism about the funding environment in 2024.
Coinbase Ventures, the venture arm of the popular crypto exchange, remains optimistic about the future. A spokesperson for Coinbase Ventures highlighted several factors contributing to their positive outlook.
Advancing regulatory clarity, maturation of protocol infrastructure, institutional buy-in, and innovation in user interaction with on-chain products.
Led by billionaire investor Mike Novogratz, Galaxy Ventures acknowledges the challenging nature of the crypto venture capital landscape but is committed to investing in early-stage projects.
According to Mike Giampapa, General Partner at Galaxy Ventures, the fundraising environment is expected to remain muted due to high interest rates.
However, the industry may see further consolidation as larger companies engage in mergers and acquisitions. Startups with sustainable business models, especially in areas such as blockchain and stablecoins, are expected to attract more investments.
Hong Kong-based Animoca Brands paints a “very optimistic” outlook for 2024 and expects a significantly healthier financing environment.
The firm's Co-Founder and Chief Executive Officer, Yat Siu, points out a shift in momentum in the crypto market and the potential start of a new bull cycle.
*This is not investment advice.