Estimates from PitchBook suggest that venture capitalists are poised to invest approximately $12 billion into crypto projects throughout 2024.
During the previous bull market, VCs predominantly supported application layer startups like Coinbase. However, analysts at the research firm anticipate a shift back to basics this year.
Robert Le, a crypto analyst at PitchBook, explained to DL News, “This cycle we haven’t seen any applications getting these large investments.”
Instead, venture capitalists are directing their attention towards infrastructure projects, specifically layer 1s, which provide the foundational support for various crypto applications and networks.
One standout deal from the first quarter of 2024 was awarded to Together AI, a developer of an open-sourced decentralized cloud platform. In March, the company secured a significant investment of $106 million in an early-stage round led by Salesforce Ventures.
During the first quarter, VC investments in the crypto sector surged by 40%, reaching $2.4 billion compared to the prior period.
The emphasis on infrastructure projects is a key factor contributing to Le’s estimation that the industry will see only a modest increase of 2.4% in fundraising compared to the $9.4 billion raised in 2023.
Le drew parallels to traditional infrastructure projects, noting that entities like Amazon Web Services typically raise proportionally less capital compared to application-level startups such as Uber and Facebook.
However, Le remains optimistic about the trajectory of application projects, expecting them to attract more investment as the cycle progresses.
Source:dlnews.com
