PANews reported on January 17 that according to CoinDesk, Galaxy Digital said in a research report on Wednesday that despite the recent rise in digital asset prices, cryptocurrency venture capital (VC) activity is still lower than the previous bull market level. In 2024, the total capital allocation of venture capital funds to the crypto industry will be US$11.5 billion, lower than in 2023. Galaxy pointed out that in the previous bull markets in 2017 and 2021, VC activity was highly correlated with crypto asset prices, "but in the past two years, despite the rise in cryptocurrencies, VC activity has remained sluggish."

There are multiple reasons for the stagnation in the venture capital market. Galaxy said that these reasons include a "barbell market" in which Bitcoin and its new spot ETFs have taken center stage, while meme coins have limited "marginal net new activity." These meme coins have difficulty obtaining funding support and have "questionable longevity." The report said that new projects at the intersection of artificial intelligence (AI) and cryptocurrencies are gaining attention, and upcoming regulatory changes may bring more opportunities for stablecoins, decentralized finance (DeFi), and tokenization. The report noted that some large investors may gain cryptocurrency exposure through spot Bitcoin ETFs "rather than turning to early-stage VC investments."

Galaxy said the United States completed the most deals and invested the most funds in the fourth quarter. Galaxy added that early-stage deals accounted for 60% of the total investment in the fourth quarter, and stablecoin companies raised the most funds. The report also pointed out that venture capitalists invested a total of $11.5 billion in startups focusing on cryptocurrencies and blockchain in 2024. These funds invested $3.5 billion in 416 deals in the fourth quarter, a 46% increase from the previous quarter.