The number of pre-seed funding rounds for Bitcoin (BTC) startups has surged by 767% since 2021, as indicated in a recent report from a venture capital entity.
In 2024, Bitcoin pre-seed transactions saw a year-over-year increase of 50%, accompanied by a 27.5% rise in the number of startups securing funding.
Christopher Calicott, the managing director of the firm, credited the uptick in deals to the strong security features of the BTC network:
“Many entrepreneurs within the crypto space are returning to the Bitcoin framework as the ideal foundation for their ventures. This makes complete sense: The most secure, dependable, and decentralized blockchain is undoubtedly the platform of choice.”
Nonetheless, the capital accumulated in Bitcoin pre-seed funding rounds fell by over 22% in 2024, with both the median round size and the median startup valuation consistently decreasing from 2021 to 2023.
Median valuations for pre-seed Bitcoin startups have not returned to 2021 levels.
The value of funding rounds made a slight recovery in 2024, yet it did not reach the peaks set in the previous bull market of 2021, mainly due to ambiguous crypto regulations in the U.S. under the former SEC leadership.
Additionally, current macroeconomic concerns stemming from fears of a prolonged trade conflict, persistently high interest rates, and the looming threat of a recession in the United States have further dampened enthusiasm for speculative investments like cryptocurrency.
The total number of funding deals and unique Bitcoin startups has shown a consistent upward trend since 2021.
Related: VC Insights: Eight-figure funding deals indicate that the crypto bull market is far from over.
Crypto VCs do not anticipate funding levels in 2025 to match those of 2021-2022
In January, Deng Chao, CEO of an institutional asset management firm, indicated that favorable crypto regulations in the U.S. would enhance VC investment in the sector in 2025.
However, he cautioned that ongoing macroeconomic disruptions and geopolitical instability could lead to heightened price volatility, potentially undermining the positive effects of regulatory changes.
On April 2, President Trump enacted an extensive tariff directive, imposing a baseline assessment of 10% on imported goods from all nations, which triggered a downturn in financial markets.
The crypto markets endured a decline amidst trade war anxieties and economic instability.
Assets characterized as high-risk, such as stocks and cryptocurrencies, often suffer during periods of trade conflict and economic uncertainty as investors tend to retreat to safer options like cash, government bonds, and stable commodities.
A venture capital firm that invested $1.5 billion in crypto ventures in 2022 has recently announced plans to raise only $1 billion in the first half of 2025, citing the evolving market conditions.
Similarly, analysts at another firm have projected a 50% year-over-year growth in VC-driven crypto investments in 2025, but indicate that funding levels will not reach the heights seen in 2021-2022.
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