The VC funding for the crypto market took another set back in the last quarter of 2024. According to the capital market analytics company PitchBook’s Crypto VC Trends report, the fourth quarter of 2024 saw a sharp drop in crypto venture capital deals, suggesting that investors are growing more picky about how they distribute their money.
The report highlights that there were 653 cryptocurrency deals in total during the first quarter of 2024. Quarterly drops were seen in the number of deals, which dropped 46% from Q1 to 351 in Q4.
Surprisingly, the trend came during the most of productive quarter of the year. Q4 2025 saw a massive surge in the prices of cryptocurrencies with nations, institutions and regulators jumping onboard, making the fall of VC funding contrary to market trends.
VC Deal Volume Increases in Q4 2024
The report also shows that in Q4, overall investment volume increased despite the drop in the number of deals. Crypto VC funding reached $2.7 billion in Q1 but fell in Q2 and Q3, according to PitchBook data. Investment volume recovered to $2.6 billion in Q4, representing a 13% increase from the previous quarter.
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Why Are Crypto VC Deals Seeing A Slump?
A number of factors have contributed to the decline in venture capital (VC) funding in the cryptocurrency industry. First, because of the substantial dangers associated with the sharp price swings of cryptocurrencies, market volatility has caused investors to become more cautious.
Uncertainty has also been brought about by the growing regulatory scrutiny of the cryptocurrency sector, especially from nations like the United States. VCs are concerned about possible legal challenges as a result of the SEC and other authorities tightening laws.
Furthermore, there is less trust in the area now that high-profile enterprises and exchanges have failed. The state of the economy, including growing interest rates and inflation, has also caused VCs to concentrate on more stable, safer industries.
VCs are now less inclined to provide sizable sums of money to cryptocurrency firms due to these combined issues.
Web3 Deals Thrive Despite Larger Downfall
The industry that received the most venture money in 2024 was Web3 (which includes decentralized communities, metaverse and games, non-fungible token (NFT) platforms, and AI-integrated crypto ventures).
Over $800 million in venture capital investments were made in the industry in Q4 2024, with Praxis, a utopian city that is favorable to artificial intelligence and cryptocurrency, garnering a significant portion of these investments.
The platform revealed a $525 million financial pledge on October 15. The Web3 industry earned the most venture capital investments of any industry in 2024, totaling $2.1 billion over 142 agreements.
With $1.8 Billion in 106 acquisitions, blockchain networks—which include interoperability solutions and bridges—as well as layer-1 and layer-2 networks came in second.
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