- VC funding in crypto dropped month over month.
- Funding trended positive compared to last year.
- Crypto VC funding is still below the 2021 peak.
Despite criticism from crypto insiders, venture capital funding plays an important role in the industry. Funding enables innovative projects to get off the ground by hiring engineers and promoting their products.
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In August, venture funding in crypto decreased compared to the prior month. However, funding still trended positively over the last year.
Crypto Venture Capital Trends in August 2024
August 2024 saw a mixed performance in venture capital investments within the cryptocurrency industry. According to RootData, the industry raised $785 million through venture capital investments, marking a 22% decline from the $1.01 billion last month.
Despite the monthly decline, investment is trending upward from last year. Compared to August 2023, venture capital investment rose 20% from $660 million. The number of funding rounds also rose, from 78 projects in August 2023 to 110 in August 2024. This is just 1% lower than the 111 funding rounds in July 2024.
DeFi, AI Dominate Crypto Funding
The projects that gained the most funding were those in decentralized finance (DeFi) and artificial intelligence (AI). Investments in DeFi, notably, accounted for 25% of the total funding, or $196 million. DeFi continues to be a promising field for investors due to its potential to change how financial services work.
Notable examples include Story Protocol by PIP Labs, which secured $80 million in a series B funding round. This DeFi platform enables writers to monetize their content directly on the blockchain. Moreover, Bridge secured $58 million to develop a global stablecoin payment network.
Thanks to the ongoing interest in AI, crypto projects that fall into that category secured 15% of total investments, or $118 million. Examples include CryptoInsights, an AI-driven analytics platform, which secured $45 million in Series A funding for algorithms for predicting crypto market trends. Moreover, AIChain raised $30 million in a seed funding round for using AI to improve smart contracts.
On the Flipside
- AI integration with blockchain continues to be a focus for investors. For instance, Tether invested $420 million in Nvidia GPUs for powering AI applications.
- Venture capital funding in crypto is often a target of criticism. Many in the crypto space see VC interests as contrary to the decentralized ethos of crypto.
Why This Matters
Venture capital funding remains a key gauge of interest in the crypto market and its perceived potential.
Read more about criticism of venture capital in crypto:
What’s Behind Hamster Kombat Bashing Venture Capitalists
Read more about Solana’s NFT performance in August:
Solana’s August NFT Sales Reach $79M, Second Only to Ethereum
