After a strong start in the first quarter, marked by the debut of Bitcoin ETFs in the USA, the development of cryptocurrencies weakened in the second quarter. It was a negative quarter for most tokens; however, some managed to close the quarter with gains.
The fourth Bitcoin halving took place this quarter, and crypto miners adapted to the new economic realities following the halving. The Ethereum network reached new milestones in daily active addresses, validators, and transaction volume. Bitcoin ETFs saw a net inflow of nearly 15 billion USD; transactions with stablecoins reached an all-time high of almost 3 trillion USD.
In the second quarter, aside from memecoins, the DeFi and GameFi sectors performed particularly well compared to other sectors. Among the newly introduced tokens, Notcoin recorded the largest increase and sparked a boom in similar game concepts where users earn coins by tapping.
Although Polygon and Ethereum continue to dominate in terms of the number of addresses, other blockchain networks have shown significant growth. Optimism and Base have made notable progress in this area. The standout performance this quarter came from Ton Blockchain, which saw an astonishing increase in addresses by 236%, from 11.3 million at the beginning of the quarter to over 36.9 million at the end.
May was characterized by moderate growth, despite slight price losses for several major cryptocurrencies. Overall, the second quarter of 2024 was marked by relatively low volatility and correspondingly small price movements. We still assess the overall market sentiment as very positive.
VC Investments in Blockchain and Crypto
In the past quarter, fundraising volume showed a robust increase of 22.5% compared to the previous quarter, continuing its upward trend despite the challenging market environment. The largest transactions included investments in companies such as Monad ($225 million), Farcaster ($150 million), Berachain ($100 million), Polymarket ($70 million), and Babylon ($70 million).
In the venture capital sector, Paradigm stood out by leading three of the five largest early-stage deals during this period. Companies in the network technology sector emerged as leaders in fundraising this quarter, collectively raising over $850 million, which accounts for 23.7% of the total fundraising volume. These developments highlight the dynamic changes and future trends shaping the current investment landscape in technology and innovation.
Looking ahead to the third quarter of 2024, the evolution of fundraising in the crypto sector will indicate whether the strong growth can continue or if the markets will experience a broader diversification of investments.
In the second quarter of 2024, over 75% of new investments flowed into companies that are still in a very early stage of development, with a further 20% going to companies in later stages. Despite the ongoing efforts of venture capital-funded crypto funds, bolstered by reserves from 2021 and 2022, larger general venture capital firms have either exited the sector or significantly reduced their investments. This shift has created challenges for later-stage startups seeking funding.
Looking ahead to the third quarter, the trends observed in the second quarter highlight both the resilience and evolving nature of the cryptocurrency fundraising landscape. While early-stage companies continue to attract substantial investments, the decline in later-stage funding indicates a change in investor sentiment and market adjustments.
If you still don’t have your own Crypto wallet, you should check out this article:
About Crypto Diva
I’m already in the Future… Meet me there! Blockchain Technology is my passion and I have dedicated my career and research path to DeFi. My ultimate goal is to encourage more female professionals in the DeFi industry.
As the Sales and Marketing Manager of coinIX & COINVEST, I’ve got the privilege of being in close contact with Blockchain investment firms, as well as the innovative web3 projects which are creating the foundations the future financial world. I love to make the impossible possible and i’m willing to go the extra mile for that. Be my companion in my DeFi journey and I’ll show you everything.
Peace & Love,
Your Crypto Diva
Stay in touch with me: