Thanks to an influx of early-stage investments in blockchain-related projects in March, funding for cryptocurrency companies reached an 18-month high.
Total new funding for cryptocurrency companies has reached more than $1.4 billion, according to The Block Deals Dashboard. This makes March the best month since September 2022, when the sector received more than $2 billion in funding.
March was a banner month, due in part to a surge in early-stage, or Series A, investments, according to John D'Antoni, director of research for The Block. There were more than 20 early-stage investments during the month, a huge jump from February, which had nine such investments, which is in line with last year's monthly average, according to D'Antoni.
The increase in financing for this sector coincided with the rise in prices. Bitcoin, which began rising sharply in early February, surpassed $70,000 for the first time ever this month.
“Despite the upbeat price performance of digital assets, some wondered why a similar rebound had not been seen in venture financing. This query was valid, but it stemmed from a misconception regarding the timing of deal announcements,” D’Antoni said. “In fact, most deals are not disclosed immediately after they happen, creating a natural lag between deal activity and price performance. Project deals often expire one to two months, or sometimes even, before they are officially announced.”
'More money on the table'
David Garcia, co-founder and managing partner of Borderless Capital, recently provided a relatively straightforward assessment of why there has been an increase in new deals. “There is more money on the table,” he added. It was announced this week that Borderless Capital will co-lead a $15 million investment in the DePIN Layer 1 blockchain project.
D'Antoni said this month's increase is greater than the high number. “March is our most reliable measure to date of the vitality of venture capital activity in the market,” he said. “Notably, deal activity has been steadily rising for three consecutive months, with project financing up approximately 64% month-on-month.”
Token sales in March helped bring in some of the largest amounts for the month. Monad Labs and Optimism, classified as “infrastructure” deals, raised $213 million and $89 million, respectively, through token deals, according to The Block Deals Dashboard.
The total dollar amount invested in cryptocurrency and blockchain-related companies reached a milestone last month when it surpassed $90 billion. Block Research has been tracking cryptocurrency investments since 2017.
More money may come into cryptocurrency projects through venture capitalists in the coming months. For example, on Thursday, it was revealed that Marc Andreessen, Accolade Partners, and Galaxy Digital invested in crypto VC firm 1kx's latest fund, which raised $75 million. 1kx focuses on consumer-targeted cryptocurrency applications and has made just under half a dozen investments with its latest funds, including Kiln, Pudgy Penguins, Rarible and The Sandbox.
Disclaimer: The Block is an independent media outlet that provides news, research and data. As of November 2023, Foresight Ventures is the majority investor in The Block. Foresight Ventures is investing in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is a core program of Foresight Ventures. The Block continues to work independently to provide objective, influential and timely information about the cryptocurrency industry. Below are our current financial disclosures.
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