Venture Capital Investments In Crypto Rise After Two-Year Drought
Date
5/21/2024 10:24:10 AM
(MENAFN- Yolo Wire) Venture capital firms allocated $2.4 billion U.S. to %Cryptocurrency companies in the first quarter, the largest amount in nearly two years.
Crypto venture capital investments peaked at $11.1 billion U.S. in the first quarter of 2022. Since then, there had been seven consecutive quarters of declining investment volumes.
In the final quarter of 2023, venture capital firms around the world put only $1.7 billion U.S. towards crypto companies.
Some analysts say they now expect the volume and pace of venture capital investments to steadily accelerate throughout the remainder of this year and into 2025.
The crypto industry enjoyed explosive growth in 2020 and 2021, but a series of high-profile bankruptcies in 2022 led venture capital firms to pullback their investments.
However, in recent months, venture capital firms have grown more bullish on crypto, especially after U.S. regulators approved spot %Bitcoin (CRYPTO: $BTC) exchange-traded funds (ETFs).
The U.S. Securities and Exchange Commission (SEC) faces a deadline of May 23 to decide on a first application it received from investment firm VanEck to offer an %Ethereum (CRYPTO: $ETH) ETF.
As with Bitcoin, a spot Ethereum ETF would track the price movements of the digital asset without requiring that investors hold Ether in a cryptocurrency wallet.
Ethereum's price has increased more than 30% in the last 48 hours as optimism grows that the SEC will approve the spot ETF application from VanEck and other asset managers.
Bitcoin's price is currently trading at $71,000 U.S., having risen 60% so far this year.
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