Key insights

• 💼 VC investment in crypto startups has decreased by 20% in Q3 compared to Q2.
• 📉 Market stagnation and focus on meme coins may be contributing to VC hesitancy.
• 💰 The correlation between BTC's price and VC investment has eroded
• 📈 Bitcoin's rise has dominated the narrative, leaving other crypto trends in the dust.
• 🔍 Shift towards early stage crypto projects in VC investment
• 🚀 Significant growth in AI services and reduction in last cycle's big winners
• 🔄 High deal activity in crypto infrastructure, gaming, and DeFi, with most VC deals and investment going to US-based projects
• 📈 Venture capital interest in US crypto projects remains strong despite regulatory challenges, pushing entrepreneurs to launch projects in crypto-friendly countries

Q&A

• What are the challenges and potential trends in venture capital interest in the crypto market?

  Venture capital interest in US crypto projects remains strong despite regulatory challenges. Entrepreneurs are launching projects in crypto-friendly countries. The absence of VCs and retail investors presents a short-term challenge for the crypto industry, but the potential return of both groups and the fading of meme coin hype could lead to a bullish trend in the market.

• What are the concerns about VC fundraising and investment in crypto projects?

  Macro and crypto-specific reasons are impacting VC involvement. The average fund size in Q3 reached its lowest level since 2017. VC fundraising in 2024 is projected to be the weakest since 2020.

• What were the high deal activity sectors in Q3, and where did most VC deals and investment go?

  Q3 saw high deal activity in crypto infrastructure, gaming, and DeFi. Most VC deals and investment went to US-based projects.

• What are the trends in VC funding for different crypto categories?

  There is significant growth in AI services and a reduction in last cycle's big winners. Deal counts for last cycle's winners have increased, possibly foreshadowing a future boom in these sectors. Crypto projects focusing on media and education have seen significant decreases in deals.

• What are the shifts in venture capital investment in the crypto market?

  The report shows a shift towards early stage crypto projects in VC investment, a drop in valuations throughout 2023 followed by a rebound since Q2, and a focus on trading exchange, layer one cryptos, and leading narratives from the last cycle for VC funding.

• What is dominating the narrative in the crypto market, and how is it affecting VC investors?

  Bitcoin has taken over the narrative, outperforming other trends like defi and NFTs. VC investors are waiting for the next big narrative to invest their cash, and determining it is crucial for investors to stay ahead in the crypto market.

• What is the correlation between BTC's price and VC investment?

  The correlation between BTC's price and VC investment has eroded, with VCs showing limited interest despite bitcoin's price movements.

• Why has venture capitalists' investment in crypto startups decreased?

  VC investment in crypto startups has decreased by 20% in Q3 compared to Q2, possibly due to market stagnation and a focus on meme coins, which may be contributing to VC hesitancy.

• 00:00 Venture capitalists' investment in crypto startups has decreased, possibly due to the recent market stagnation and focus on meme coins. The correlation between BTC's price and VC investment has eroded, with VCs showing limited interest despite bitcoin's price movements.
• 02:46 Bitcoin's rise has dominated the narrative, leaving other crypto trends in the dust. VC investors are waiting for the next big narrative, and determining it is crucial to beat them to the punch.
• 05:23 The report shows a shift in venture capital investment towards early stage crypto projects, a drop in valuations throughout 2023 followed by a rebound, and a focus on trading exchange, layer one cryptos, and leading narratives from the last cycle for VC funding.
• 08:24 The VC funding for different crypto categories shows significant growth in AI services and a reduction in last cycle's big winners. Deal counts for last cycle's winners have increased, possibly foreshadowing a future boom in these sectors. Crypto projects focusing on media and education have seen a significant decrease in deals.
• 11:18 Q3 saw high deal activity in crypto infrastructure, gaming, and DeFi. Most VC deals and investment went to US-based projects. VC fundraising in 2024 is projected to be the weakest since 2020.
• 14:12 Venture capital interest in the US crypto projects is strong, but regulatory challenges are pushing entrepreneurs to launch projects in crypto-friendly countries. The absence of VCs and retail investors presents a short-term challenge, but the potential return of both groups and the fading of meme coin hype could lead to a bullish trend.