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Crypto companies raise $2.5bn in first quarter — a ‘lacklustre’ 29% increase

Crypto companies raise $2.5bn in first quarter — a ‘lacklustre’ 29% increase
Snapshot
High interest rates seen constraining increase in venture capital crypto investment. Credit: Kurt Amthor/imageBROKER/Shutterstock
By
Mike Millard
  • Crypto investment is compared with previous bull runs.
  • MoonPay cooperating with PayPal on crypto in US.
  • BTC-e operator pleads guilty to money laundering conspiracy.

Crypto companies raise $2.5bn in first quarter

Crypto companies raised almost $2.5 billion in venture capital investment in the first quarter of this year, representing a 29% increase in dollar value and a 68% higher deal count on a quarter-on-quarter basis, according to a research report compiled by Galaxy Digital.

“After 3 consecutive quarters of declining deal count and capital invested, both rose in Q1,” according to the report, which also noted that alongside the big increase in deal count, which rose to 603, the amount of capital invested gained a comparatively modest 29%.

While Bitcoin and the broader crypto market soared dramatically in the first quarter, leading to a renewed sense of optimism, the investment amount “seemed slightly more lacklustre than the sentiment,” the report said.

“Higher interest rates will continue to pose a challenge to venture funds seeking to raise capital and, therefore, startups seeking investment from those funds,” it said, adding that a hangover in crypto appetite after the blowups of 2022 may also have provided a damper.

The researchers noted that “sentiment and activity are improving, but still well below levels seen during prior bull markets.”

Crypto bull runs in 2017 and 2021 showed stronger correlations between the amount of venture capital dollars invested and crypto prices, they said. In 2023 and 2024, investment has remained “well below prior levels while cryptos have rallied.”

In spite of a “tricky” regulatory environment, companies headquartered in the US continued to raise the most capital in the first quarter, pulling in 43%. Singapore had 11%, the UK had 10%, Hong Kong had 8%, and France had almost 6%.

MoonPay collaborates with PayPal on crypto

Web3 infrastructure company MoonPay announced a new business relationship that allows its US users to buy crypto using their PayPal accounts.

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PayPal is available now to MoonPay users in the US and will be accessible through MoonPay’s partner networks by mid-year.

BTC-e operator pleads guilty to money laundering

Russian national Alexander Vinnik, an operator at the former BTC-e crypto exchange, pleaded guilty to a charge of conspiracy to commit money laundering, according to a news release from the US Attorney’s Office in San Francisco.

From 2011 until it was shut down in 2017, BTC-e processed more than $9 billion in transactions worldwide, and “was one of the primary ways by which cyber criminals around the world transferred, laundered, and stored the criminal proceeds of their illegal activities,” the release said.

Vinnik faces a maximum of 20 years in prison. A sentencing date has not yet been set.

Crypto market movers

  • Bitcoin is up 1.13% today at $63,896.82.
  • Ethereum is up 1.83% today at $3,167.19.

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