The crypto market is witnessing a pivotal shift, as revealed by a recent study from Bybit and Treehouse, a renowned digital asset research entity. Their 2024 Institutional Industry Report unveils a landscape where the market is maturing. It depicts a surge in institutional trust and a remarkable influx of venture capital funding, signaling a profound transformation within the crypto industry.
The crypto market witnessed remarkable expansion over the past months. Their total value climbed swiftly – from just above $1 trillion in October 2023 to beyond $2.5 trillion by March 2024. Investors felt increasingly confident in crypto assets during this timeframe. Large sums of funds kept pouring into blockchain-based projects and cryptocurrencies.
This report dives deep into on-chain data, revealing insights into institutional crypto investments and their growing fascination with AI and Bitcoin ecosystems. Notably, it explores the long-term effects of Exchange-Traded Funds (ETFs) and sheds light on the upcoming Bitcoin halving, an anticipated event that may reshape market dynamics.
Crypto Investments Surge to $1.94 Billion Spurred by VC Funding
The cryptocurrency market is witnessing a remarkable revival in Venture Capital (VC) crypto investments. Quarter 4 of 2023 witnessed a substantial 21% rise in VC deals, amounting to 174 transactions with $1.42 billion in disclosed funding. This upward trajectory persisted in Quarter 1 of 2024, marking a further 36% uptick in deals, with disclosed funding soaring to $1.94 billion.
Infrastructure projects are currently the primary focus of VC crypto investments, attracting significant capital to bolster the core elements of the blockchain ecosystem. These projects encompass hardware wallets, blockchain data providers, and other solutions that address industry challenges and drive innovation.
The report also highlights a key benefit for investors: low correlation between cryptocurrencies and traditional indices. Both BTC and ETH maintain correlations below 3% with traditional equity and fixed-income markets. Notably, Bitcoin even exhibits negative correlations, indicating its potential as a valuable diversification tool for portfolios heavily invested in equities.
While the leading cryptocurrencies like Bitcoin and Ethereum continue to dominate, the report acknowledges the rise of challenger chains – alternative blockchains offering faster transaction speeds and lower fees. Since Q4 2023, native tokens of these challenger chains have significantly outperformed ETH. Solana (SOL), the leading challenger by transaction volume and Total Value Locked (TVL), remains the frontrunner in this space.
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