Cryptocurrency Investment Trends: A 2024 Perspective

Looks like we’re in for an interesting year in the crypto market. With a total funding of $9.33B in crypto for 2024, it’s a year of sparse growth compared to the previous year. But here’s the kicker – there’s a notable change in deal sizes. VC funds are now mixing early-stage seed rounds with the bigger, undisclosed, and private funding rounds. While Tier 1 funds were raking in big bucks, Animoca Brands took the lead by completing 106 rounds and became the reason behind 20 rounds.

Over the past twelve months, 1,535 projects were disclosed. The final numbers for the year may change a bit as not every round is disclosed at the same time. It’s been a rollercoaster for crypto funding, matching the overall market’s flow. Backers were far more choosy about their investments in crypto and beyond.

Another twist is that this year might also see more funding, projected to amass a total of $18B. Although VC funding remains lower than the 2022 hype where quarterly funding was above $10B.

Market Shifts Leading to Consolidation

Consolidation in the crypto market is real, especially with merger and acquisition activities surging. Companies with strong financial backing are scooping up distressed assets. The trend is expected to keep rolling as existing crypto companies acquire struggling competitors. Regulatory tightening, particularly in the US, might also redirect funds to areas with clearer regulations, like EMEA and APAC.

The biggest sectors by number benefiting from VC funding have seen a rise, with Web3 and DeFi leading the charge. 276 Web3 general projects got funding while DeFi saw 375 projects in the mix last year. The monthly deal count for AI projects spiked to over 27%, thanks to the recent rise of AI agents in different platforms.

There’s also the importance of private funding while raising capital and forming partnerships. Usually, these rounds attract institutional or accredited investors who help raise significant capital. Even with market turbulence, the number of fundraising deals, especially in initial rounds has increased, showing that there’s still interest in crypto fundamentals.

Closing Thoughts: The Trends Shaping Crypto

With AI entering the cryptocurrency market, there’s a shift in investment strategies. New AI tools are expected to help traders predict trends and minimize investment risks. With increased regulatory clarity, such as on stablecoin issuance, the crypto industry’s long-term sustainability may see an uptick. Needed clarity from governments may drive up institutional interest.

This marketing of crypto’s environmental sustainability is evident in Regenerative Finance (ReFi) initiatives and adopting energy-efficient technologies like Proof of Stake (PoS) algorithms. As the crypto landscape continues to evolve, understanding these trends will be key for crypto enthusiasts and investors.