Venture capital funding in the cryptocurrency sector rose by 52.5% in March, totaling $1.16 billion and predominantly directed towards infrastructure and decentralized finance projects.
In the past month, there were a total of 180 publicly-announced investments. Notably, one-fifth of these deals ranged between $1 million to $3 million, while slightly over 15% secured funding in the $5 million to $10 million range. The majority of funded projects were U.S.-based, but they comprised less than 10% of the total deal count.
Optimism, an Ethereum layer-2 blockchain, dominated the funding landscape by raising $89 million in a private sale, followed by Zama, a cryptography startup, with a Series A funding of $73 million.
The amount of monthly deals increased by 25% from February and more than 70% from the previous year, while the total funding saw a 28% surge compared to March 2023.
Leading VC firms have shown strong interest in crypto-focused investments for the upcoming year, with Andreessen Horowitz (a16z) dedicating $30 million towards a Web3 gaming fund on April 1.
Following a lackluster 2023 due to the collapse of FTX in late 2022, VC funding has been steadily rising this year alongside a renewed enthusiasm for crypto and the launch of spot Bitcoin exchange-traded funds (ETFs) in the U.S.
The largest share of funding in March went to infrastructure projects, receiving approximately $283 million, while decentralized finance (DeFi) projects secured $228.1 million. Centralized finance (CeFi) projects, like exchanges, ranked third with $85.5 million in funding.
Overall, March's funding exceeded $1 billion, marking the first time since November that VC funding crossed this threshold for a single month.
