Venture capital (VC) funding in the cryptocurrency sector has experienced a positive shift, marking an increase after two years of decline in the first quarter of 2024. According to a report by data analysis platform Crypto Koryo, shared on social media platform X, both the amount of total investments and the number of VC-backed projects have risen since the last quarter of 2023. The report highlighted a significant 38% increase in funds allocated during this quarter.

In the latest update, it was disclosed that there was a 49% surge in the number of projects securing funding. This level of funded projects has not been seen since the end of 2021, indicating a promising trend in crypto VC funding.

Crypto Koryo suggests that this could signal the start of a new cycle, drawing parallels to the patterns observed before major VC investments began flowing into the crypto industry in late 2020.

The analysis also pointed out that, unlike previous periods where traditional banks and non-crypto VC firms led investments, this quarter witnessed heightened interest from venture firms focused specifically on cryptocurrencies.

Venture capital firms such as Andreessen Horowitz Crypto, OKX Ventures, Multicoin Capital, Paradigm, and Polychain were key players in the investments made during the quarter. In March alone, crypto VC funds made substantial investments totaling over $1.1 billion across 180 deals. Investments in crypto infrastructure and decentralized finance projects surged by 52.5% in March compared to the previous month.

The rise in funding in the first quarter of 2024 builds on the positive momentum seen in the fourth quarter of 2023. Compared to the third quarter of 2023, crypto VC investments showed a 2.5% increase in the first quarter of 2023. This marked the resurgence of VC investments in emerging crypto projects since March 2022.

After a challenging year in 2022, characterized by dwindling venture capital inflows into the sector and unfavorable market conditions, the recent investment activities are garnering significant interest from investors towards various altcoin projects, leading to uptrends in the altcoin market.