- The introduction of Bitcoin ETFs in the U.S. has sparked significant interest among financial institutions in cryptocurrencies.
- Venture funding for cryptocurrency-related businesses reached $1.9 billion in Q4 2023, marking a notable increase from the previous quarter.
- This growth was driven by investments in companies like Swan Bitcoin and Blockchain.com.
A PitchBook analysis provides data spanning global capital markets, suggesting that the recent debut of bitcoin exchange-traded funds (ETFs) in January has piqued the interest of financial organisations in the cryptocurrency market.
Cryptocurrency market sees $1.9B surge in Q4
The latest analysis from PitchBook, a provider of comprehensive data across the global capital markets, indicates that venture funding for cryptocurrency-related businesses surged to $1.9 billion in the fourth quarter of 2023, marking a 2.5% increase from the previous quarter. This uptick in funding represents the first notable rise in venture capital investments in cryptocurrency ventures since March 2022.
According to PitchBook, major cryptocurrency firms that secure investments primarily concentrate on financial and technological solutions. These solutions encompass the development of decentralised computing infrastructure and the process of tokenising tangible assets such as stocks and real estate through blockchain technology.
Blockchain.com and Swan Bitcoin, two well-known cryptocurrency exchanges, raised $100 million and $165 million in funding during the quarter.
Also read: U.S. bitcoin ETF approval sees $4.6 billion trading volume on launch day
Analysis links first spot bitcoin ETFs to financial interest
The first spot bitcoin exchange-traded funds (ETFs) were introduced in the U.S. in January, which may have contributed to the financial institutions’ heightened interest in cryptocurrencies, according to PitchBook.
In the first quarter of 2023, cryptocurrency companies secured $2.6 billion across 353 financing rounds. PitchBook revealed a 12.2% decline in overall deals and an 11% decrease in deal value compared to the previous quarter.
Also read: Independent bankruptcy examiner ordered to investigate FTX collapse
Market instability was exacerbated by the collapse of the FTX in November 2022, and a fall in venture capital investments was partly caused by larger global economic concerns, including inflation and higher interest rates.
The cryptocurrency market had a resurgence in 2023, with reports of the entry of significant traditional financial organisations like BlackRock.
