Despite Bitcoin hitting a record high of $100,000 in Q4 2024, venture capital activity in crypto startups remained flat, with VC deal size down nearly 90% since 2018.
PitchBook’s latest data reveals that the median size of venture capital deals in the crypto space has plummeted by nearly 90% since 2018, showing a shift in investor behavior.
In a Feb. 10 research report, PitchBook’s senior venture capital reporter Michael Bodley noted that even with the rise in Bitcoin’s (BTC) value in Q4 2024, which traditionally drives more investment into the sector, VCs appear to be more selective.
Investors concentrated their bets into “fewer deals, pushing up median valuations,” Bodley notes, adding that pre-money valuations for crypto startups rose across the board, with the median valuation hitting $32.1 million in 2024, up from $18 million in 2023.
PitchBook’s senior analyst Robert Le pointed out that in 2022, crypto entrepreneurs “could raise capital with a white paper and very little traction.” Now, he says, investment sentiment has shifted, emphasizing that any founder seeking to raise capital in the current market “has to really show a significant amount or traction or something else other than a technical white paper.”
In an interview with PitchBook, analysts said this trend will likely continue, with concentrated deals becoming the norm in crypto venture funding.
Still, in late December 2024, PitchBook’s Le forecasted that crypto VC funding would be “much much stronger” in 2025 compared to 2024. In an interview with CNBC, Le said that the market is going to see “$18 billion or more in venture capital dollars that’s going to be invested into crypto.” That’s a 50% increase from 2024, but still less than the roughly $30 billion “that was invested in 2021 and 2022,” he added.
