Crypto investments reach an 18-month high, with an increase in early-stage deals

Thanks to a flood of early-stage investments into blockchain-related ventures in March, funding for crypto companies hit its highest mark in 18 months. 

New funding for crypto companies totaled more than $1.4 billion, according to The Block Deals Dashboard. That makes March the best month since September 2022, when the sector raked in more than $2 billion in funding.

March was a banner month, in part, because of a surge in early-stage, or Series A, investments, according to John Dantoni, The Block Research Director. There were more than 20 early-stage investments during the month, a massive jump from February, which had nine such investments, matching the monthly average for the past year, according to Dantoni.

The increase in funding for the sector has coincided with a rise in prices. Bitcoin, which began rising precipitously in early February, passed $70,000 for the first ever this month.

"Despite the upbeat price performance of digital assets, some pondered why a similar resurgence hadn't manifested in venture funding. This query was valid, yet it stemmed from a misconception regarding the timing of deal announcements," said Dantoni. "In reality, most deals aren't disclosed promptly after they occur, leading to a natural lag between deal activity and price performance. Venture deals often conclude one to two months, or sometimes even longer, before they're officially announced."

'More money on the table'

Borderless Capital co-founder and managing partner David Garcia recently gave a relatively straightforward assessment of why there has been an increase in new deals. "There is more money on the table," he said. Announced this week, Borderless Capital co-led a $15 million investment in the DePIN Layer 1 blockchain project peaq.

Dantoni said there is more to this month's increase than the high number. "March serves as our most reliable gauge yet of the vitality of VC activity in the market," he said. "Notably, deal activity has seen a consistent uptick for three consecutive months, with venture funding surging approximately 64% month over month."

Token sales in March helped bring in some of the largest amounts for the month. Monad Labs and Optimism, both classified as "infrastructure" deals, raised $213 million and $89 million, respectively, through token deals, according to The Block Deals Dashboard.

The total dollar amount invested in crypto and blockchain-related companies hit a significant milestone last month when it surpassed $90 billion. The Block Research has been tracking crypto investments since 2017.

More money may be coming into crypto projects through venture capitalists in the months ahead. For example, on Thursday, it was revealed that Marc Andreessen, Accolade Partners, and Galaxy Digital invested in the latest fund of crypto VC firm 1kx, which raised $75 million. 1kx focuses on consumer-targeted crypto applications and has made fewer than half a dozen investments with the latest fund, including Kiln, Pudgy Penguins, Rarible, and The Sandbox.