Crypto VC Rebounds in Q1: More Deals, $2.5B Invested, Amid Tough Fundraising

In Q1, the cryptocurrency venture capital sector saw a significant rebound with deal counts increasing by over 50% quarter-over-quarter to more than 600, and capital invested rising by 29% to $2.5 billion. Despite this growth, the figures remain below previous highs. Key areas of investment included infrastructure, gaming, and Bitcoin Layer 2 solutions. However, fund managers are currently facing a challenging fundraising environment. Meanwhile, the trend of open-ended, rolling funding rounds is gaining traction among crypto startups, helping to quickly enhance valuations as funds aim to deploy unspent cash accumulated in 2021 and 2022. Additionally, the potential for investment in liquid crypto is seen as significant, yet it is largely untapped, and private crypto valuations are described as 'insane' unless engaged from the seed stage.