Crypto Investments Hit 18-Month High, With Early-Stage Deals Surging

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By Harper Lee

Thanks to a flood of early investments in blockchain-related companies in March, funding for crypto companies reached its highest level in 18 months.

New funding for crypto companies totaled more than $1.4 billion, according to The Block Transactions Dashboard. This makes March the best month since September 2022, when the sector raised more than $2 billion in funding.

March was a record month, in part because of a surge in early-stage, or Series A, investments, according to John Dantoni, director of research at The Block. There were more than 20 startup investments during the month, a massive jump from February, which had nine such investments, matching last year’s monthly average, according to Dantoni.

Increased funding for the sector has coincided with rising prices. Bitcoin, which began rising rapidly in early February, surpassed $70,000 for the first time this month.

“Despite the strong performance of digital asset prices, some wondered why a similar resurgence had not occurred in venture financing. This question was valid, but it stemmed from a misconception regarding the timing of announcements of transactions,” Dantoni said. “In reality, most deals are not disclosed promptly after completion, leading to a natural lag between deal activity and price action. Venture capital deals often close within one to two months, or sometimes more, before being officially announced.”

“More money on the table”

Borderless Capital co-founder and managing partner David Garcia recently gave a relatively simple assessment of why there has been an increase in new deals. “There’s more money on the table,” he said. Announced this week, Borderless Capital co-led a $15 million investment in blockchain project DePIN Layer 1 peaq.

Dantoni said this month’s increase is not limited to the high number. “March is our most reliable indicator of the vitality of venture capital activity in the market,” he said. “In particular, deal activity has seen a steady rise for three consecutive months, with venture financing increasing by approximately 64% month-over-month.”

Token sales in March helped bring in some of the largest amounts of the month. Monad Labs and Optimism, both classified as “infrastructure” deals, raised $213 million and $89 million, respectively, through token transactions, according to The Block Deals dashboard.

The total amount invested in crypto and blockchain-related companies reached a major milestone last month by surpassing $90 billion. The Block Research has been tracking crypto investments since 2017.

More money could be invested in crypto projects through venture capitalists in the coming months. For example, on Thursday it was revealed that Marc Andreessen, Accolade Partners and Galaxy Digital had invested in crypto-VC firm 1kx’s latest fund, which raised $75 million. 1kx focuses on consumer-facing crypto applications and has made fewer than half a dozen investments with the latest fund, including Kiln, Pudgy Penguins, Rarible and The Sandbox.

Disclaimer: The Block is an independent media outlet providing news, research and data. Since November 2023, Foresight Ventures has been a majority investor in The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to provide objective, impactful and current information about the crypto industry. Here is our current financial information.

© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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