The strong recovery in the crypto market is beginning to impact the VC space

Crypto VC comeback: Signs of recovery emerge after two-year downturn

After two years of decline, there are early signs of recovery in the crypto VC market, as highlighted in this excerpt of Sygnum’s Crypto Market Outlook 2024. Get the report for more insights into key sectors and trends for the year ahead.

Venture funding volumes track the crypto market quite closely but with a lag. The peaks of venture funding have come with a quarter’s delay after the market’s peak, making new highs as the crypto asset prices were crashing. This delay is due in part to the time lag of negotiating and announcing deals, with the funding decisions tracking the secondary markets much more closely.

Monthly volumes averaged around three-quarters of a billion dollars last year – well ahead of the last bear cycle, where monthly volumes were below a quarter of a billion dollars. However, this figure represents a substantial drop from the USD 3bn monthly averages of the last bull cycle.


Average valuations for deals also notably decreased last year, a welcome development that enforces greater financial discipline on projects, encourages more discernment among investors and ultimately leads to higher eventual returns.

There has been a shift in preferred deal structures, favouring equity investment in related private companies over deals for future tokens. This trend is partly due to the greater immediate influence over project governance that equity investment allows. The hybrid format of equity raise coupled with investment in an associated token has become increasingly common.

A lower proportion of funding went into use cases compared to the previous bull cycle, with a greater allocation towards infrastructure. It is also interesting to note that a lot of the VC firms are invested mostly in projects in the Ethereum ecosystem, while Solana and Bitcoin-based projects are underweighted.

The strong recovery in the crypto market is beginning to impact the VC space, with funding showing tentative signs of growth again while current valuations and deal structures promise attractive returns for investments made at this time. As many projects that raised funding during the last bull market will need additional funding soon, we may also witness consolidation and an increased level of M&A activity.

Katalin Tischhauser - Sygnum Crypto Market Outlook 2024

Disclaimer: The information in this publication pertaining to Sygnum Bank AG (“Sygnum”) is for general information purposes only, as per date of publication, and should not be considered exhaustive. This publication does not consider the financial situation of any natural or legal person, nor does it provide any tax, legal or investment advice. This publication does not constitute any advice or recommendation, an offer or invitation by or on behalf of Sygnum to purchase or sell any assets. No elements of precontractual or contractual relationship are intended. While the information is believed to be from accurate and reliable sources, Sygnum makes no representation or warranties, expressed or implied, as to the accuracy of the information. Sygnum expressly disclaims any and all liability that may be based on such information, omissions, or errors thereof. Any statements contained in this publication attributed to a third party represent Sygnum‘s interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. Sygnum reserves the right to amend or replace the information, in part or entirely, at any time, and without any obligation to notify the recipient of such amendment / replacement or to provide the recipient with access to the information. Simultaneously, there is no obligation of Sygnum to inform recipients of information, if before provided information later becomes outdated, inaccurate or obsolete, unless otherwise provided by applicable law. The information provided is not intended for use by or distributed to any individual or legal entity in any jurisdiction or country where such distribution, publication or use would be contrary to the law or regulatory provisions or in which Sygnum does not hold the necessary registration, approval authorisation or license. Except as otherwise provided by Sygnum, it is not allowed to modify, copy, distribute or reproduce, display, license, or otherwise use any content for commercial purposes.

Read next article

Contact Sygnum Singapore

I am a
Submit Mandatory fields

Local restrictions – Provision of cross-border services

It looks like you are using a computer with an IP address located outside of Switzerland.
If you are located in Switzerland, please click “Continue” to access the Sygnum Bank AG (Sygnum) website.

If you are not located in Switzerland, please read below.

This website and the information contained herein are addressed solely to persons residing or domiciled in Switzerland.

Sygnum is a regulated bank supervised by the Swiss Market Financial Authority (FINMA). The products and services on this website are authorised in Switzerland. Sygnum cannot promote its products and services in other countries where it is not authorised by the supervisory authority of that country to do so.

If you click on “Continue” to visit this website, you confirm that you have read and understood the above and you are visiting this website on your own initiative without any active promotion or solicitation from Sygnum.

Investor qualification

The following content is available to qualified investors. Please confirm your details below to visit this page, or please see our other digital asset updates here.

Security alert

Stay alert to fraudulent communications. Sygnum will never post messages on social media or private messaging applications regarding Sygnum banking access or logins. If you have concerns, contact us.