Money Keeps Pouring Into Crypto, With VC Funding Above 1 Billion Per Month

Venture capital keeps allocating billions to crypto projects. The last two months saw a significant uptick in financing, with DeFi among the biggest winners compared to the previous year's results.

Crypto venture funding

Whether influenced by Bitcoin's upward journey or other factors, the crypto industry keeps getting soaked in cash. Venture capital funds have been investing heavily in blockchain-related projects, increasing the pace in recent months.

As per RootData, a visual and structured crypto data provider, crypto fundraising has crossed the $1 billion mark for two consecutive months. March and April saw the highest volumes (approximately $1.1 billion and $1.02 billion, respectively) since December 2022, with a slight exception for November 2023, when VC investment totaled nearly $1.3 billion.

VC crypto funding
Source: RootData

The comparison between the initial four months of 2023 and 2024 also shows an uptick in the volume of VC investment: $3.57 billion vs $3.44 billion across, respectively, 623 and 478 rounds, with the median and average slightly higher last year.

The category breakdown covering the last five years has remained pretty much unchanged in recent months, with one notable switch: the DeFi leapfrogged to the fifth place outranking NFTs. The rise may be related to the regulatory noose tightening around crypto trading worldwide and the inherent market pressure to move to less supervised environment.

DeFi funding
Source: RootData

The shift is even more visible in the comparison between the corresponding periods of the current year and 2023. DeFi has jumped to second place with investment exceeding $461 million from January to April – an increase of over $180 million or 65% year-on-year. Interestingly, CeFi has grown even more despite totaling less by a bit over $100 million in the same period.

January to April 2024

DeFi crypto VC funding
Source: RootData

January to April 2023

DeFi CeFi VC funding
Source: RootData

VC has apparently lost interest in the social and entertainment category which is short of approximately $140 million compared to the last year results. NFTs and DAOs are also among losers, while tools and information have been on the rise. As illustrated in the graphics, infrastructure is leading the pack. Firms focused on the blockchain nitty-gritty secured over $1 billion this year.

As expected, the biggest chunk of the money comes from the US, followed by Singapore, the UK, India, China, and Hong Kong. Ethereum is the unquestionable winner among VC-funded Layer-1 and Layer-2 projects, followed by Polygon, BNB Chain, Arbitrum, and Solana. Bitcoin ranks ninth, same as last year.

For comparison, DeFiLlama provides slightly different numbers, suggesting that April falls slightly below the $1 billion mark. According to the website, the record funding month so far was November 2021, when crypto companies managed to secure over $7 billion.