Bitcoin Startups See Huge Increase in VC Funding Despite Overall Decline

The landscape of venture capital funding saw a decline in 2023, but one sector soared to new heights – Bitcoin startups. According to a report from Trammell Venture Partners (TVP), funding for Bitcoin startups more than quadrupled last year, with the number of Bitcoin-native pre-seed deals increasing by a whopping 360%.

TVP defines a “Bitcoin native company” as a firm whose success is closely tied to the Bitcoin network and believes in BTC as the global monetary asset of the future. This excludes late-stage firms, Bitcoin miners, and other crypto-oriented companies.

While the total amount of venture dollars invested in Bitcoin fell slightly to $305 million, the number of deals rose significantly by 69.2%. This growth far outpaced the crypto industry, which saw a decrease in both funding and deals.

Notable investors in the Bitcoin space included General Catalyst, Y Combinator, and Tim Draper’s Draper Associates. Draper, a longtime Bitcoin advocate, has been actively supporting Bitcoin startups, contributing to the sector’s growth.

The surge in funding for Bitcoin startups coincides with a resurgence in developer activity on the Bitcoin network. New technological capabilities like the NFT protocol Ordinals and the upcoming “Runes” protocol have sparked interest and innovation in the space.

Overall, industry experts are optimistic about the future of Bitcoin-native startups. Nic Carter, co-founder of CoinMetrics, noted that the pace of Bitcoin startup development is greater than ever before, signaling a promising future for the sector.