Emily Walker
Galaxy Digital’s latest report provides insights into trends observed in the crypto market during the past year, particularly focusing on venture capital (VC) activities.
The findings indicate that in Q4 2024, nearly 50% of all VC funding within the cryptocurrency and blockchain space was allocated to startups located in the United States.
Moreover, US-based companies secured 46% of the overall investment, significantly outpacing other locations, with Hong Kong at 16%, and Singapore and the UK trailing behind.
Funding Patterns in Early and Late Stages
Further analysis of the report shows that the US was also the leader in deal volume, accounting for 36% of all VC transactions in that quarter. Despite facing regulatory challenges and pressure, the US remained a key player for both capital influx and deal activity.
According to Galaxy’s head of research Alex Thorn in a social media post, the positive outlook for the sector, along with the potential for a pro-crypto administration, may further enhance the US’s position in global digital currency venture capital.
Venture capital in Q4 2024 demonstrated a strong interest in both early and late-stage crypto startups. Notably, around 60% of the funding was funneled into early-stage ventures, indicating ongoing enthusiasm for groundbreaking blockchain initiatives.
The remaining 40% went to later-stage firms, spurred by major investments like Cantor’s $600 million in Tether.
The report also noted an increase in median deal sizes over the year, mirroring trends in the broader venture capital landscape. Although the number of deals saw a slight decrease, total investments reached $3.5 billion for the quarter, marking a 46% rise from the previous quarter.
Despite the funding surge, crypto venture funds faced hurdles, with only $1 billion invested across 20 newly established funds, nearing lows not observed since early 2021.
Future Prospects for US Crypto Startups
As the US cements its role as the leading hub for digital currency venture investments, analysts are optimistic about prospects for 2025.
The possibility of a more crypto-supportive administration may help mitigate existing regulatory uncertainties, potentially leading to increased investment in the sector. Additionally, the robust activity in early-stage funding highlights that innovators are still finding ways to attract financial backing, which is crucial for fostering ongoing innovations.
Beyond the US, the report identifies significant trends in the global crypto venture market, particularly the growth of Web3 projects, decentralized finance (DeFi), and blockchain infrastructure.
These areas topped capital distribution, showcasing where investors perceive the highest potential for expansion. As the market evolves, these sectors are likely to attract further investments and influence the future landscape of the crypto ecosystem.
Image created with DALL-E, Chart sourced from TradingView