By Elizabeth Howcroft
LONDON (Reuters) – Global venture capital investment in cryptocurrency companies rose to $2.4 billion in the first three months of 2024, data showed on Monday, in a tentative sign that investor interest is returning.
Crypto venture capital flows peaked at $11.1 billion in the first quarter of 2022, ahead of seven consecutive quarters of declining volumes, with just $1.7 billion in the final quarter of 2023, PitchBook data showed .
“The crypto industry is still in its early stages and there is plenty of room for growth and innovation,” PitchBook senior analyst Robert Le said in a report.
“Barring a major market decline, we expect the volume and pace of investments to continue to increase throughout the year,” he added.
A combination of low interest rates and high risk appetite had propelled the cryptocurrency industry to explosive growth in 2020 and 2021, but a series of bankruptcies at major cryptocurrency companies in 2022 spooked investors and made fall the price of bitcoin.
Investors who had backed the US exchange FTX were forced to write down their investments to zero, while millions of people were left out of money when several crypto platforms stopped allowing withdrawals.
Over the past year, some investors have become more confident in cryptocurrencies, helped by U.S. regulators who in early 2024 approved exchange-traded funds that track the spot price of bitcoin.
has steadily recovered from the 2022 lows, reaching a new all-time high of $73,803.25 in March, although it has struggled to find direction since.
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