From theblock by Yogita Khatri

Venture capitalists invested around $13.7 billion in crypto and blockchain startups in 2024, a 28% increase from the $10.7 billion deployed in 2023, according to The Block Pro's Funding Dashboard. However, funding remains far below the peaks of $33.3 billion in 2022 and $29 billion in 2021.

"It's surprising that VC funding has not sped up more quickly relative to 2023 with bitcoin up over 150% YTD [year to date]," Rob Hadick, general partner at Dragonfly, told me. "I expect that's likely because the LP [limited partner] market has continued to stay relatively muted, and most VCs do not yet have the confidence to deploy their remaining funds in earnest until they raise (or at least become comfortable they will be able to raise) new funds."

Will Nuelle, general partner at Galaxy Ventures, echoed this sentiment, telling me that while the funding increase in 2024 is promising, it feels modest compared to the broader market rebound.

Meanwhile, Hack VC's co-founder and managing partner Ed Roman told me the growth aligns with his expectations. "The election results did not occur until late into the year, so the ripple effects of that haven't yet been felt," he said.

Key drivers of growth

The bullish crypto market this year, regulatory optimism, institutional adoption and new narratives like crypto-AI integration drove the 2024 funding increase, several VCs told me.

When crypto prices rise, and the sentiment is strong, both funds and angel investors deploy more freely, and more talented founders enter the space, said Lauren Stephanian, general partner at Pantera Capital.

Alex Odagiu, investment director at Binance Labs, also attributed the growth to the broader market rally this year. Milestones like the approval of bitcoin spot ETFs validated crypto as an asset class, attracting institutional capital and accelerating inflows, he said. Odagiu added that positive signals from a crypto-friendly U.S. administration under Donald Trump are expected to sustain this momentum.

Kyle Samani, co-founder and managing partner at Multicoin Capital, also expressed optimism about the political landscape. "We've never had a pro-crypto President nor a pro-crypto Congress. We have both starting in 2025," he said. "We remain optimistic that they will prioritize crypto-related issues and pass clear rules that pave the way for more innovation and help keep crypto onshore."

A record year for early-stage deals

Early-stage funding dominated in 2024. Pre-seed deals reached an all-time high of over 1,180 (+68% year-over-year or YoY), underscoring strong interest in emerging projects, per The Block Pro's Funding Dashboard. Seed-stage funding totaled $3.4 billion, nearing 2021's $3.8 billion despite reduced overall inflows. Series A rounds saw over 175 deals (+59% YoY), raising $2.8 billion (+46% YoY). Meanwhile, mid- and late-stage funding declined, paving the way for mergers and acquisitions (M&As).

Top sectors

Infrastructure led 2024 crypto VC funding, with around $5.5 billion invested across over 610 deals — a 57% YoY increase and the highest for the sector to date, per The Block Pro's Funding Dashboard. Infrastructure investments targeted scaling blockchain networks to improve speed, cost and scalability, with a strong focus on Layer-2 solutions for Bitcoin and other blockchains. Modular technologies, including data availability, shared sequencers and rollups-as-a-service, attracted significant funding. Liquid staking protocols and developer tooling also remained key areas of interest.

NFTs and gaming startups raised $2.5 billion, slightly exceeding 2023's $2.2 billion. Despite steady funding, on-chain metrics revealed declining activity in NFT marketplaces as trends like memecoins gained traction. With over 610 deals, NFTs and gaming remained a key focus, though the market is maturing from its 2022 peak of 936 deals.

Enterprise blockchain funding dropped sharply, falling 69% YoY to $164 million from $536 million in 2023. Once central to the "Blockchain, not Bitcoin" narrative, enterprise applications have lost investor interest, with attention shifting to more scalable blockchain use cases.

Web3 showed resilience, raising $3.3 billion over the past two years, close to the $3.4 billion raised in 2021–2022. Emerging areas like SocialFi, crypto-AI and decentralized physical infrastructure networks (DePINs) drove this growth. DePIN stood out as a fast-growing vertical with over 260 deals and about $1 billion in total funding.

DeFi saw a strong resurgence in 2024, with over 530 deals (+85% YoY) compared to 287 in 2023. Bitcoin-based DeFi use cases, such as stablecoins, lending protocols and perpetual swaps, drove growth. Layer-2 networks and non-custodial payments, including cross-chain liquidity and stablecoins, also added momentum.

Looking ahead

Top crypto VCs are cautiously optimistic about 2025. While funding levels aren't expected to return to the highs of 2021–2022, there's consensus that startups with strong product-market fit and tangible user adoption are best positioned to secure capital in the year ahead.

Visit our website next week for comprehensive pieces on crypto VC funding and M&A outlooks for 2025.