Crypto venture funding climbs for first time in nearly 2 years after bitcoin's stellar run

Crypto had a big bounceback year in 2023. Now, venture investors are returning.

Venture funding for crypto-related companies in the fourth quarter of 2023 totaled $1.9 billion, a 2.5% increase from the prior quarter, PitchBook said Thursday. It marks the first time that venture VC investments in crypto startups have risen since the March quarter of 2022.

It's a welcome stat for crypto entrepreneurs who've been bruised by the last couple of years of the so-called "crypto winter," which made it much harder for founders to raise money.

Venture funding for crypto firms slumped significantly in 2022 after a rise in interest rates from major central banks led to a flight of investors from riskier assets like tech stocks and cryptocurrencies.

Problems for crypto ventures were compounded that year by major collapses of crypto companies like Do Kwon's controversial algorithmic stablecoin Terra and Sam Bankman-Fried's FTX.

Major venture funds like Andreessen Horowitz, Sequoia Capital, and Tiger Global were bruised by the downturn in crypto deals. In some cases, like the fall of FTX, funds had to write off their entire stake.

"It's no secret investors have been writing more checks," Le said in a CNBC interview. "Now we're starting to see it in the data."

Le said that crypto venture funding has bottomed with a rise in crypto asset prices and public market valuations of crypto-related companies such as Coinbase, Marathon Digital, and MicroStrategy.

In the past 12 months, bitcoin has more than doubled in price and is now worth over $52,000 apiece. Coinbase stock has similarly surged, up nearly 140% year-over-year.

"Generally a lot of times we see there's a correlation between investments in private markets and the public markets," Le told