Venture Capital Interest in Bitcoin Startups Has Skyrocketed: Research

Even as venture capital activity declined across the board, funding for bitcoin startups quadrupled in 2023, according to a new report.

Research from Trammell Venture Partners (TVP) shows that the number of native bitcoin pre-seed deals skyrocketed 360% last year, while the number of funded bitcoin companies increased 56.9%.

Venture Capital Funding Explodes in bitcoin

As explained in TVP bitcoin-venture-capital-research/” data-wpel-link=”external” target=”_blank”>Friday reportA “bitcoin native company” is a company whose product success is mutually aligned with that of the bitcoin network and which is based on the principle that btc is the “global monetary asset of the future.”

That includes early-stage startups, but discounts late-stage companies, bitcoin miners, and “cryptocurrency”-oriented companies.

While the absolute number of bitcoin venture dollars invested fell -12.5% ​​to $305 million in 2023, the bitcoin venture deal count increased by 69.2%. In contrast, the equivalent figures for the crypto industry were -64.5% and -35.3%, respectively.

crypto-enterprise deals still outnumber bitcoin ones by about 20:1, although the rally in the latter last year was substantial. Some of last year's big investors included General Catalyst, Y Combinator, and Draper Associates, the early-stage venture capital firm led by veteran bitcoin bull Tim Draper.

“While 2023 was a challenging year for the broader venture capital landscape, the native bitcoin sector not only weathered the storm but emerged stronger,” TVL wrote to x on Friday, “The future looks bright for startups.” native bitcoin companies.

Rise of bitcoin Development

The increase in funding coincides with a revival of bitcoin developer activity over the past year, sparked by new technological capabilities discovered on the network. These include the nft Ordinals protocol, the bitcoin computing paradigm BitVM, and the upcoming “Runes” protocol, which will allow efficient tokens to be issued in bitcoin.

Ordinary activity began to rise again this week, as did the average cost of transacting in bitcoin. Rising fees have more developers looking for ways to create more effective bitcoin layer 2 solutions to enable more efficient transfers, and funding is moving in that direction.

“Anecdotally, I have never seen more bitcoin startups in my career.” twitter.com/nic__carter/status/1778481012428976560″ data-wpel-link=”external” target=”_blank”>saying CoinMetrics co-founder Nic Carter on Friday. “The pace right now is at least an order of magnitude higher than ever.”

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