Crypto Venture Capitalists Struggle to Keep Pace with Bitcoin Price Surge

Crypto venture capitalists have been lagging behind the recent surge in Bitcoin (BTC) prices, according to data from Galaxy Research. Despite a parabolic increase in the price of Bitcoin to over $73,000, venture capitalists only invested around $2.3 billion in the crypto market in the first quarter of FY24. This is significantly lower than the expected $14 billion that should have been invested based on historical trends.

The increase in venture capitalist investment from less than $2 billion in the previous quarter was not as substantial as anticipated. Following Bitcoin’s all-time high of $69,000 in November 2021, venture capitalists poured in $12 billion in the market during the first quarter of 2022.

One potential reason for the lower-than-expected investment could be attributed to new trends in the market, such as the launch of Spot Bitcoin ETFs, crypto restaking, and uncertainty surrounding Federal Reserve interest rates. It is also possible that venture capitalists may have opted to invest in Spot Bitcoin ETFs rather than holding BTC directly, although this information has not been disclosed yet.

Despite the slower pace of venture capitalist investment, the Bitcoin price has rebounded from a low of $56,000 to soar past $63,000. At the time of writing, BTC price has surged by 8.13% to $63,729.73, with a market cap of $1.25 trillion. The trading volume for Bitcoin has also increased by 9.48% to $32.07 billion in the last 24 hours.

The recent price increase comes amidst positive U.S. job data and a resurgence of Bitcoin ETF inflows. All Spot Bitcoin ETFs recorded inflows for the first time since launch, including Grayscale’s GBTC, with a total influx of $378 million. This positive momentum in the market could potentially influence venture capitalists to increase their investments in the coming months.