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Positive U.S. Regulatory Environment More Conducive for Crypto Corporate Activity: JPMorgan

Expectations of a more benign regulatory environment in the U.S. is leading to an increase in the number of crypto companies looking to go public and an uplift in venture capital (VC) funding, investment bank JPMorgan (JPM) said in a research report Wednesday.

The GENIUS Act's progress in the Senate has become a “key factor in anticipating a clearer and more supportive regulatory environment,” analysts led by Nikolaos Panigirtzoglou wrote.

“The anticipation of such a U.S. regulatory environment is conducive to crypto corporate activity such as IPOs and VC funding,” the authors wrote.

The Senate's Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act mandates federal regulation for stablecoins with a market cap of over $10 billion with the potential for state regulation if it aligns with federal rules.

Stablecoins are cryptocurrencies whose value is tied to another asset, such as the U.S. dollar or gold. They play a major role in cryptocurrency markets and are also used to transfer money internationally.

The bank noted that the number of crypto IPOs so far this year matches the pace of offerings seen in the bull market of 2021.

Press reports suggest that more crypto companies, including Ripple, Kraken, Consenys and CoinDesk's owner Bullish are getting ready to IPO this year, the report said.

Venture capital funding is also on the rise, and has exceeded levels seen in 2023/24, on an annualized basis, the bank said.

IPOs give crypto investors a way to diversify their digital asset exposure beyond just bitcoin BTC and ether ETH, the two largest cryptocurrencies by market cap. It means they can take advantage of opportunities in areas such as blockchain infrastructure, payments and settlement, custody and tokenization, the report added.

Read more: Flashbots Veterans Raise $20M to Tackle Crypto User Experience With OneBalance

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Conduit Raises $36M to Expand Stablecoin-Based Cross-Border Payments Beyond SWIFT

Conduit, a cross-border payments firm that uses stablecoins, has raised $36 million in a Series A round to expand its global payment rails, the company said on Wednesday. The round was led by Dragonfly and Altos Ventures, with backing from Circle Ventures and Digital Currency Group among others.

Founded in 2021, the Boston-based startup offers real-time payments that blend crypto infrastructure with traditional finance systems. Its platform supports both stablecoins and local fiat currencies, helping businesses in markets with limited dollar access or unstable currencies move money more efficiently.

The firm claims that its clients have saved over 60,000 hours in settlement time and avoided more than $55 million in fees.

Stablecoins are one of the fastest-growing sectors in crypto, and an increasingly attractive target for venture capital investments. With their prices anchored to an external asset, predominantly to the U.S. dollar, they serve as a key piece of infrastructure for digital asset trading. They are also increasingly popular vehicle for payments, savings and remittances, especially in developing countries, as a cheaper and speedier alternative to traditional banking rails.

Conduit says the funding will help it grow its footprint in Asia, Mexico and other parts of the world. Rob Hadick of Dragonfly Capital will join Conduit's board as part of the deal.

“With billions of annual transaction volume already flowing through Conduit’s platform, it has proven there’s a better way to move money globally and that stablecoins are the future of cross-border payments,” Hadick said in a statement.

Read more: Stablecoins Could Bring 'ChatGPT' Moment to Blockchain Adoption, Hit $3.7T by 2030: Citi

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Resolv Labs Raises $10M as Crypto Investor Appetite for Yield-Bearing Stablecoins Soars

Resolv Labs, the firm behind the $450 million decentralized finance (DeFi) protocol Resolv, has closed a $10 million seed round to expand its crypto-native yield platform and USR stablecoin, the team told CoinDesk in an exclusive interview.

The investment round was led by Cyber.Fund and Maven11, with additional backing from Coinbase Ventures, Susquehanna’s subsidiary SCB Limited, Arrington Capital, Gumi Cryptos, NoLimit Holdings, Robot Ventures, Animoca Ventures and others.

Stablecoins, a $230 billion and rapidly expanding class of cryptocurrencies with pegged prices to an external asset, are capturing attention well beyond their traditional use in payments and trading. A growing cadre of crypto protocols offer yield-bearing stablecoins or “synthetic dollars,” wrapping diverse investment strategies into a digital token with a stable price and passing on part of the earnings to holders.

“I view stablecoins as the perfect rails for yield distribution,” Ivan Kozlov, founder and CEO of Resolv, said in an interview with CoinDesk. “This may actually become larger than transaction stablecoins like [Tether’s] USDT in the future.”

The most notable example of the trend is Ethena’s $5 billion USDe token, which primarily pursues a delta-neutral position by holding cryptocurrencies like BTC, ETH and SOL and simultaneously shorting equal size of perpetual futures, scooping up yield from funding rates.

Resolv also pursues a similar strategy: its USR token, anchored to $1, is a delta-neutral stablecoin designed to deliver stable yields from crypto markets, while shielding holders from sharp price swings.

The protocol achieves this by splitting risk between two layers, inspired by Kozlov’s background in structured products in traditional finance. USR stablecoin holders sit in the less risky senior tranche earning stable but lower yields, with risk-tolerant investors in the protocol’s insurance layer represented by the RLP token with floating price. This model, borrowed from structured finance, aims to make crypto yields more predictable without sacrificing decentralization, Kozlov explained.

Following its launch in September 2024, the protocol quickly ballooned to over $600 million in assets driven by attractive yields during the crypto rally after Donald Trump’s election victory, DefiLlama data shows. However, as markets turned bearish and yields compressed, Resolv’s total value locked (TVL) also slid around $450 million this month.

With the new capital raise, Resolv plans to expand its yield sources to include bitcoin (BTC)-based strategies and deepening its integrations with institutional digital asset managers, Kozlov said. The protocol also aims to expand to new blockchains, widening its reach beyond early crypto adopters.

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Bitcoin Life Insurance Firm Meanwhile Raises $40M to Expand Globally

Meanwhile, a startup offering life insurance and annuities denominated in bitcoin (BTC), raised $40 million in series A funding round, CEO Zac Townsend said on Thursday in an X post.

The investment was led by venture capital firms Framework and Fulgur Ventures, with early Bitcoin-advocate Wences Casares also participating.

Traditional life insurance pays out in fiat currencies. Meanwhile flips this model, keeping premiums and benefits in bitcoin, aiming to help policyholders guard against inflation and currency devaluation. In countries where local currencies lose value, holding policies in BTC could help preserve purchasing power for future payouts. However, policyholders also take on bitcoin’s price volatility.

The firm plans to use the funds to accelerate its global rollout, targeting regions where inflation and currency instability are everyday concerns, Townsend said. Meanwhile did not disclose its current valuation or specific market entry plans in the announcement.

“This round gives us significant capital to power our journey of building the world’s largest long-term insurance and savings company,” Townsend said.

The investment follows on an earlier, $20 million round from a range of investors including Sam Altman, CEO of artificial intelligence firm OpenAI, alongside Google’s AI-focused fund Gradient Ventures. The company secured a digital life insurer license in Bermuda last year.

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Bitcoin DeFi Network Arch Finds VC Backer for Early-Stage Projects

Bootstrapping decentralized finance (DeFi) on any blockchain usually requires a mix of builders with big ideas and funders to back them. That much is as true for baselayers as it is for the financial protocols launching atop them.

Arch Labs, whose eponymous network is one of the many projects trying to bring DeFi to Bitcoin, had no trouble raising its $7 million launch capital from big-name venture firms last year. Now it’s shifting focus to help fund those smaller protocols that could make the whole network boom.

In that goal it has found a willing partner. An entire venture company, DPI Capital, is dedicating millions of dollars in resources toward backing early-stage DeFi projects that enter Arch’s first accelerator program, called Keystone.

“We’re really focused on the pillars right now, the things that are most important for growth,” said Brent Fisher, a general partner at Caymans Islands-registered DPI Capital. That means finding and funding compelling projects building borrow-and-lend protocols, decentralized exchanges, stablecoin platforms and real world asset (RWA) plays.

It’s not unheard of for venture firms to go big on a single protocol. Early Solana investor Multicoin Capital also backs many of the smaller ecosystem projects that drive activity on the blockchain. But even that giant diversifies beyond Solana. For example, it led last year’s investment in Arch.

DPI used to have a more diversified risk appetite as it chased deals across the Etheruem ecosystem. But not anymore. “I’m going all in on Arch,” Fisher said.

DPI’s yet-to-close fund will be a quasi-official venture wing for early stage projects on Arch alone. Such myopic focus carries a lot of risk. First, that the “pillar” protocols DPI picks as leaders prove the theory. Second, and more importantly, that Arch itself will catch on.

Fisher’s more focused on the counterpoint: that Arch is the winning bet, and no strategy’s better than betting on all its horses.

“This has huge potential, potentially even to knock out on Ethereum,” said Brent Fisher, general partner.

His Arch bull case stems from Bitcoin’s enduring status as the world’s most valuable crypto asset. The crypto is nearly one trillion dollars more valuable than Ethereum despite lacking a strong internal DeFi ecosystem, which has long been the runner-up’s claim to fame.

Plenty of family offices, investment companies and increasingly exchange-traded funds hold BTC and do so without much concern for their inability to deploy those coins into low risk yield plays on the Bitcoin Network, as they might with ETH on Ethereum Network.

“I think that that play is huge, because, as you see these ETFs with Black Rock and ARK and so forth, for them to even get a Delta neutral strategy of 10% is a game changer,” Fisher said.

Arch’s Bitcoin-powered programmability layer allows for such activity, Fisher said. They’re not the only network with this kind of vision, but Fisher says it’s the only one with a “true native self custody model” instead of some sort of bridging or wrapping mechanism. Keeping bitcoin on the network eliminates a level of risk, he said.

Arch’s Keystone accelerator is thus a natural pipeline for DPI to get a right-of-first refusal look at many of the teams angling to launch their BitcoinFi tech on the platform. DPI will write checks of up to $250,000 for the teams it likes and then help them find other investors and scale.

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Blockchain Data Provider Chronicle Raises $12M to Expand Infrastructure for Tokenized Assets

Chronicle, a blockchain data provider focused on tokenized assets, announced on Tuesday that it has raised $12 million in a seed funding round.

The investment was led by Strobe Ventures, formerly known as BlockTower Capital. Other backers include Galaxy Vision Hill, Brevan Howard Digital, Tioga Capital and Fenbushi Capital, alongside notable crypto angel investors such as Rune Christensen (Sky/MakerDAO founder), Andre Cronje (founder of Sonic and Yearn), Stani Kulechov (founder of Aave), Mark Phillips (co-founder of Steakhouse) and Sam MacPherson (co-founder of Phoenix Labs).

Chronicle operates as an oracle network, offering real-time data verification for tokenized financial products. It has processed more than $20 billion in total value secured (TVS) since its launch in 2017 and is expanding its infrastructure to meet rising demand. The company recently rolled out its “Verified Asset Oracle,” which ensures the authenticity of off-chain assets for issuers such as Centrifuge, Superstate and M^0.

“As banks and asset managers accelerate tokenization initiatives, Chronicle’s trusted data infrastructure provides the reliability and compliance capability these institutions require,” said Thomas Klocanas, general partner at Strobe Ventures.

The demand for real-world asset (RWA) tokenization is rising, as global banks and asset managers increasingly use blockchain rails for moving traditional financial instruments. Tokenized assets could become a multitrillion-dollar market by 2030, reports by McKinsey, Boston Consulting Group and others projected.

Chronicle aims to tap into that rising demand by integrating off-chain data with blockchain-based assets by ensuring data security, auditability and cost-efficiency through a network of validators, including established financial data providers and crypto-native organizations like Sky, formerly MakerDAO.

The company said it will use the new capital to advance product development, expand partnerships, and strengthen compliance measures, reinforcing its role as a bridge between traditional finance and digital assets.

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.

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Blockchain Data Provider Chronicle Raises $12M to Expand Infrastructure for Tokenized Assets

Chronicle, a blockchain data provider focused on tokenized assets, announced on Tuesday that it has raised $12 million in a seed funding round.

The investment was led by Strobe Ventures, formerly known as BlockTower Capital. Other backers include Galaxy Vision Hill, Brevan Howard Digital, Tioga Capital and Fenbushi Capital, alongside notable crypto angel investors such as Rune Christensen (Sky/MakerDAO founder), Andre Cronje (founder of Sonic and Yearn), Stani Kulechov (founder of Aave), Mark Phillips (co-founder of Steakhouse) and Sam MacPherson (co-founder of Phoenix Labs).

Chronicle operates as an oracle network, offering real-time data verification for tokenized financial products. It has processed more than $20 billion in total value secured (TVS) since its launch in 2017 and is expanding its infrastructure to meet rising demand. The company recently rolled out its “Verified Asset Oracle,” which ensures the authenticity of off-chain assets for issuers such as Centrifuge, Superstate and M^0.

“As banks and asset managers accelerate tokenization initiatives, Chronicle’s trusted data infrastructure provides the reliability and compliance capability these institutions require,” said Thomas Klocanas, general partner at Strobe Ventures.

The demand for real-world asset (RWA) tokenization is rising, as global banks and asset managers increasingly use blockchain rails for moving traditional financial instruments. Tokenized assets could become a multitrillion-dollar market by 2030, reports by McKinsey, Boston Consulting Group and others projected.

Chronicle aims to tap into that rising demand by integrating off-chain data with blockchain-based assets by ensuring data security, auditability and cost-efficiency through a network of validators, including established financial data providers and crypto-native organizations like Sky, formerly MakerDAO.

The company said it will use the new capital to advance product development, expand partnerships, and strengthen compliance measures, reinforcing its role as a bridge between traditional finance and digital assets.

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.

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Stablecoin Protocol Level Aims to Expand $80M DeFi Yield Token With Fresh Capital Raise

Stablecoin protocol Level raised a fresh round of venture capital to expand its $80 million yield-paying stablecoin as yield-generating digital asset offerings are increasingly in demand with a cooldown in crypto prices.

Peregrine Exploration, the development firm behind Level, received another $2.6 million led by early backer Dragonfly Capital with Polychain also participating, founders David Lee and Kedian Sun told CoinDesk in an interview. New investors include Flowdesk, Echo syndicates Native Crypto and Feisty Collective by Path, and angel investors Sam Kazemian of Frax and Albert Chon of Injective.

The latest round followed a $3.4 million raise in August, bringing total venture capital funding to $6 million to date.

Level, with its lvlUSD token, is competing in the fast-growing stablecoin asset class, one of the hottest sectors in crypto and a darling among venture capital investments. Stablecoins—cryptocurrencies with a fixed price, predominantly tied to the U.S. dollar—are a key piece of infrastructure for trading and transactions on blockchains. However, the largest issuers do not generally offer yield to users earned on assets in the backing reserve. Tether, for example, reported $13 billion profits last year, in part from the U.S. Treasury yield backing its $143 billion USDT token.

That’s why a new generation of yield-earning stablecoins is getting increasingly popular among crypto investors. Ethena’s USDe, which generates yield on a market-neutral carry trade strategy harvesting futures funding rates, zoomed to above $5 billion supply in little more than a year. Meanwhile, tokenized versions of money market funds and Treasury bills, another stablecoin alternative, hit a $4.6 billion market capitalization.

Level’s stablecoin offers investors yield from putting the backing assets to work on decentralized finance (DeFi) lending protocols like Aave, while automating its reserve management. Users can mint lvlUSD by depositing Circle’s USDC or USDT stablecoins and lock up (stake) the tokens to lend out to generate yield on-chain. As of last week, annualized yield for staked version of lvlUSD stood at 8.3%, higher than tokenized money market fund yields. Meanwhile, lvlUSD has been integrated with DeFi protocols such as Pendle, Spectra and LayerZero, and can be used as collateral on Morpho.

“Their fully on-chain, transparent approach to yield generation sets them apart from competitors relying on opaque, centralized methods,” said Sven Wellmann of Polychain, one of the investors in the protocol.

According to Level’s calculation, the protocol outpaced rival stablecoins’ yield offerings over the past month, which has helped its supply surpass $80 million in five months since its beta launch.

With the latest funding, Level plans to expand their team and marketing efforts while continuing to expand utility for lvlUSD beyond staking it, Kedian Sun explained. The protocol also plans to tap into Morpho to generate yield in the next few weeks.

With those efforts, lvlUSD could potentially push towards a $200-$250 million market cap, a key milestone the team wants to achieve, Sun said.

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AI’s Lead Over Crypto for VC Dollars Increased in Q1’25, But Does This Race Really Matter?

Crypto venture funding in the U.S. clocked in at approximately $861 million for the first three months of 2025, but was dwarfed by artificial intelligence’s nearly $20 billion haul, according to data provided by Pitchbook, showing how investors continue to pivot towards AI.

Data shows that investors closed 795 deals in the U.S in AI from January to March, with blockbuster deals like Databricks’ $15.3 billion round and Anthropic’s $2 billion raise dominating headlines.

Crypto’s largest blockbuster deal, in comparison, was Abu Dhabi’s MGX, with a $2 billion investment into Binance – the first institutional placement in the crypto exchange. Other deals of note include a $82 million raise from payment infrastructure company Mesh, ETF issuer Bitwise’s $70 million round, and digital asset bank Sygnum’s $58 million offering.

Prior reporting by Pitchbook shows that AI startups attracted one-third of global VC investment in 2024, totaling $131.5 billion, with nearly a quarter of new startups being an AI company across 4,318 VC deals, compared to crypto’s $4.9 billion across just 706 deals.

Analysis: Has AI stolen crypto’s venture dollars?

Blockbuster rounds from VCs in the AI space and headline-grabbing antics, such as OpenAI’s Sam Altman seeking trillions, and AI’s rise from technological novelty to household name thanks to transformer models, would make one think that there’s suddenly an investor preference for one over the other.

Historically, all data shows that VCs have generally favored AI over crypto, with AI and machine learning attracting consistent funding that’s expanded exponentially, according to Statista data, growing from $670 million in 2011 to $36 billion in 2020.

There’s only been one year where crypto beat AI for funding, and that comes with a caveat: narrower AI categorizations, like ABI Research‘s $22.3 billion AI estimate in 2021, suggest crypto briefly outpaced AI funding during the bullish crypto cycle before AI funding surged again to over $100 billion by 2024.

Keep in mind that all of this ignores crypto-native quirks like airdrops, which put fresh capital in the hands of users and, in turn, pump the token price, inflating the size of projects’ treasuries.

A recent report from Dragonfly found that between 2020 and 2024, the 11 largest airdrops generated $7 billion. This won’t close the gap between AI and crypto, but it shows that there are more ways to get a dollar than traditional venture capital.

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Crypto Payments Firm Mesh Raises $82M as Stablecoin Adoption Soars

Crypto payments firm Mesh announced on Tuesday it has raised $82 million to expand its stablecoin-based payments settlement network globally.

The series B round was led by Paradigm, with ConsenSys, QuantumLight, Yolo Investments, Evolution VC, Hike Ventures, Opportuna and AltaIR Capital participating.

Most of the capital raise was settled in PayPal’s PYUSD stablecoin, according to the press release.

Mesh develops a payments network on blockchain rails, connecting crypto wallets with exchanges payment service providers for merchants. With Mesh, users can pay with crypto assets such as bitcoin (BTC), ether (ETH) and Solana’s SOL, while merchants settle the payment in stablecoins of their choice including Circle’s USDC, Paypal’s PYUSD and Ripple’s RLUSD.

“Regulatory clarity is taking shape, institutions are leaning in, and stablecoins are booming, Bam Azizi, CEO and cofounder of Mesh, said in a LinkedIn post on Tuesday. “With this capital, we’re expanding globally to making crypto payments as easy as using a credit card.”

Stablecoins are one of the fastest-growing sectors in crypto, and has mushroomed to a $200 billion asset class within digital assets. With their prices anchored to an external asset, predominantly to the U.S. dollar, they serve as a key piece of infrastructure for digital asset trading. They are also increasingly popular vehicle for payments, savings and remittances, especially in developing countries, as a cheaper and speedier alternative to traditional banking rails.

Thanks to the rapid growth, VC firms are increasingly invest in projects building stablecoin services and infrastructure. Felix Hartmann, founder and managing partner at investment firm Hartmann Capital, said in a Tuesday report that the “big trade in crypto” are stablecoins, as together with tokenized financial assets they will lead the next wave of growth in digital asset adoption.

Payments giant Stripe’s acquisition of stablecoin platform Bridge for $1.1 billion last year was a pivotal moment, underscoring the potential of stablecoins in the global payments landscape.

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HashKey Group Gets $30M Investment From Chinese VC Gaorong Ventures: Report

Gaorong Ventures, a prominent Chinese venture capital firm known for its early backing of internet giants in the country, has invested $30 million into the operator of Hong Kong’s largest licensed crypto exchange, HashKey Group, according to a Bloomberg report.

The backing came at a pre-money valuation of over $1 billion, according to the report. A HashKey spokesperson reportedly said that the post-money valuation was close to $1.5 billion.

China has banned cryptocurrencies a number of times. Its latest crackdown came in 2021 saw various crypto platforms leave the country, yet Chinese investors are upping their bets on the cryptocurrency space. Tencent Holdings, for example, has recently invested in crypto market maker Wintermute, the outlet reports.

Early last year, HashKey Group raised a $100 million Series A at a $1.2 billion post-money valuation.

The Hong Kong-based HashKey, established in 2018, operates the region’s first two licensed cryptocurrency exchanges and engages in venture funding and asset management.

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Former Binance Labs Makes First Investment Following Zhao’s Return: Report

YZi Labs, the rebranded venture capital arm of crypto exchange Binance, made its first investment following founder Changpeng “CZ” Zhao’s release from prison, Fortune reported on Wednesday.

The company formerly known as Binance Labs led a $16 million funding round into Sign, a startup that seeks to simplify token distribution and bring verification of credentials on-chain, according to the report.

“Proper distribution builds trust, and verification is an essential part of it. As more people move on-chain, this is a critical part of the foundational infrastructure,” Zhao, said in an email, according to Fortune’s report.

The rebrand to YZi Labs means the firm has turned from being the exchange’s venture capital arm into the family office of Zhao and Binance co-founder Yi He, with Zhao taking an active role in investments.

Zhao was released from U.S. prison in September following a four-month prison sentence for violating the Bank Secrecy Act by failing to set up an adequate know-your-customer program at Binance.

He also agreed to a pay a $50 million fine and step down as Binance CEO as part of his guilty plea.

YZi Labs did not immediately respond to CoinDesk’s request for comment.

Read More: Restaking Protocol Puffer Finance Reveals Upcoming Airdrop Details

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Crypto Venture Capital Funding to Rise This Year, Won’t Hit Previous Highs: JPMorgan

Crypto venture capital (VC) funding is expected to recover this year as regulatory clarity and more crypto-friendly policies emerge during the tenure of President Donald Trump, JPMorgan (JPM) said in a research report Wednesday.

The Wall Street bank noted that venture funding for the industry has been subdued in recent years. This may have been due to enforcement actions by the U.S. Securities and Exchange Commission (SEC) and the climate of regulatory uncertainty during the previous administration, analysts led by Nikolaos Panigirtzoglou wrote.

The start of the EU’s Markets in Crypto Assets (MiCA) regulations, which came into force at the end of December, is expected to “further bolster VC engagement,” the report said.

Still, the level of funding is unlikely to match previous peaks seen in 2021/22, JPMorgan said, as crypto venture capital firms face a number of challenges.

Giants of traditional finance (TradFi) such as Blackrock (BLK) and Franklin Templeton are increasing their participation in the crypto market, and this leaves less market share for VC firms in stablecoins, tokenization and decentralized finance (DeFi), the bank said.

Nascent crypto projects are avoiding large token sales to VCs and are increasingly turning to community-driven platforms to raise money, the report noted.

High interest rates also present a challenge for VC funding, JPMorgan said.

The growth of cryptocurrency exchange-traded fund (ETF) products is “inducing a trend towards passive investing,” and this could be diverting capital away from VC firms, the report added.

Read more: Crypto Venture Capital Market Remained Difficult in 2024, Galaxy Digital Says

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Crypto Venture Capital Market Remained Difficult in 2024, Galaxy Digital Says

Crypto venture capital (VC) activity remains below the levels seen in previous bull markets despite the recent rally in digital assets, Galaxy Digital (GLXY) said in research report on Wednesday.

Total capital allocated to VC funds in 2024 was $11.5 billion, less than in 2023.

Galaxy noted that VC activity was highly correlated to crypto asset prices in previous bull runs in 2017 and 2021, “but for the last two years activity has remained depressed while cryptos have rallied.”

Stagnation in the venture capital market is due to a number of reasons.

These include a “barbell market” where bitcoin (BTC) and its new spot exchange-traded funds (ETFs) have taken centre stage, with “marginal net new activity” from memecoins, Galaxy said. These memecoins are hard to fund and have “questionable longevity.”

There is growing enthusiasm for new projects at the intersection of artificial intelligence (AI) and crypto, the report said, and forthcoming regulatory changes may result in more opportunities in stablecoins, decentralized finance (DeFi) and tokenization.

Some large investors may be gaining exposure to crypto via spot bitcoin ETFs “rather than turning to early-stage VC investing,” the report noted.

The U.S. was responsible for the most deals completed in Q4 and the most capital invested, Galaxy said.

Early-stage deals accounted for 60% of total investment in the fourth quarter, and stablecoin companies raised the most money, Galaxy added.

Venture capitalists put $11.5 billion in total into crypto and blockchain focused startups in 2024. These funds invested $3.5 billion, a 46% rise quarter-on-quarter, across 416 deals in Q4, the report added.

Read more: Crypto VC Market ‘Tepid’ as Q3 Investments Declined 20%, Says Galaxy Digital