Venture capital companies are taking over!


Sat 23 Mar 2024 ▪ 4 min reading ▪ by Mikaia A.

Like a yo-yo, cryptocurrencies oscillate between declines and rises, causing concern among investors. However, financial giants and even venture capital firms are now looking into bitcoin and its ilk, causing widespread astonishment. A buying fever begins to spread.

Giant bitcoin coin and investor

The crypto venture rally

Dreaming of a market capitalization exceeding $3 trillion, as in November 2021, is it still realistic for cryptocurrencies? Crypto enthusiasts are currently feeling a rush of excitement over the incessant price fluctuations of BTC and its peers. For the moment, the market capitalization of cryptos stands at 2,582 billion dollars.

THE venture capital companies are embarking on a frantic race towards the world of cryptocurrencies, carried away by the market surge, reports CoinGape. The fever is palpable as Bitcoin and other digital assets show an uptrend, sparking renewed interest in this new asset class.

THE recent market rebound and thegrowing enthusiasm among institutional investors have convinced the big names in venture capital to dive into the sector. The movements are multiplying: Hack VCa major player, plans to raise a new seed fund worth $100 million to support young shoots in the cryptosphere.

Alex Pack, the managing partner of Hack VC, revealed that last month a fund of $150 million had already been mobilized, a substantial part of which had been invested.

But the excitement doesn't stop there: other actors like Hivemind Capital prepare to launch a $50 million fund dedicated to NFTswhile Framework Ventures orchestrated a fundraising of $69 million for the Berachain blockchain platformthus propelling it towards a dizzying valuation of 1.5 billion dollars.

Crypto financing: A cyclical evolution

Despite the current rush of venture capital firms into the digital asset space, funding for crypto startups suffered a sharp slowdown in 2023. Investment fell sharply, falling by more than two-thirds from the previous year to $9.5 billion globally.

Data provided by Galaxy Digital reveals that venture capital firms operating in the cryptocurrency sector have only raised around $6 billion last yearmarking a drastic drop from $37 billion in 2022 and $20 billion the year before.

This downward trend highlights the intrinsic volatility of the cryptocurrency financing ecosystem, subject to rapid variations dictated by various market dynamics. Furthermore, the general climate of the cryptocurrency market has been tarnished in previous years by the COVID-19 pandemic and the Federal Reserve's rising interest rates, contributing to an unfriendly atmosphere for investments.

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Nonetheless, this recent surge in interest from venture capital firms demonstrates renewed faith in the potential of the cryptocurrency market. Supported by current market dynamics and regulatory progress, this trend reflects increased confidence in the future of the sector.

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Mikaia A. avatarMikaia A. avatar
Mikaia A.

The blockchain and crypto revolution is underway! And the day when the impacts will be felt on the most vulnerable economy in this world, against all hope, I will say that I had something to do with it

DISCLAIMER

The comments and opinions expressed in this article are those of the author alone, and should not be considered investment advice. Do your own research before making any investment decisions.

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