Crypto Vc Activity Hits $4.6b In Q3, Second-best Quarter Since Ftx...

Half of the capital raised in the third quarter was from seven venture deals, with Revolut leading the way with a $1 billion investment.

Crypto-focused venture capital investment reached $4.65 billion in the third quarter, the second-highest amount of activity since crypto exchange FTX collapsed in late 2022 and decimated venture bets on crypto.

Galaxy Digital’s head of research, Alex Thorn, said in a report on Monday that Q3’s venture bets were a 290% quarter-on-quarter jump and the largest quarter since Q1, which saw $4.8 billion in investments.

The growing investment activity comes amid a lull period for crypto venture capital, which has largely pulled out of the industry following the uncovering of FTX’s massive fraud in November 2022, which led to the exchange's collapse into bankruptcy.

Q3 saw 414 venture deals, with seven accounting for half of the capital raised over the quarter.

Those included financial technology company Revolut, which attracted $1 billion, crypto exchange Kraken with $500 million and crypto-focused US bank Erebor with $250 million.

Meanwhile, established companies, those founded in 2018, accounted for most of the capital raised, while companies founded in 2024 accounted for the highest number of deals.

“Pre-seed deal count as a percentage has trended down consistently as the overall industry has matured,” Thorn said.

Prior bull runs in 2017 and 2021 featured a high correlation between VC activity and liquid crypto asset prices, but Thorn said that for the last two years, activity has been more subdued while prices have risen.

“The venture stagnation is due to a number of factors, such as waning interest in previously hot crypto VC sectors like gaming, NFTs, and Web3; competition from AI startups for investment capital; and higher interest rates, which disincentivize venture allocators broadly,” he added.

Source: CoinTelegraph