Galaxy Digital: $3.19 Billion in VC Funding for Crypto and Blockchain Companies This Q2

Despite the market downturn, Galaxy Digital reported that the crypto venture capital market continued to rebound in the second quarter of 2024.Web3, Layer 1 and Bitcoin Layer 2 were the most notable investment categories during the quarter, according to The Block. Crypto and blockchain companies received $3.19 billion in venture capital funding in the second quarter, up slightly from $3.16 billion in the first quarter. The median deal value rose from $3 million to $3.2 million, and the estimated value jumped from $19 million to $37 million. There were 739 crypto VC deals in Q2, an 8% increase from Q1.The Web3 space attracted $495.5 million in investments, including a $150 million funding round for Web3 social media platform Farcaster.Layer 1 raised $371 million, while Bitcoin's Layer 2 project garnered $94.6 million in investments, a year-over-year increase of 174 percent.

While the U.S. still dominates in terms of the number of deals and the amount of money invested, regulatory resistance could force more companies to move overseas. Analysts note that the multi-year correlation between bitcoin price and venture capital has broken down this year, and despite bitcoin's 43 percent year-to-date gain, investment capital is still well below what it would have been in 2021-2022, when bitcoin prices were high. Analysts suggest that a cryptocurrency recovery in the second half of the year could spark more venture capital activity.