- PitchBook report says VC fundraising may top 2023.
- Tougher regulator scrutiny, scandals and economic uncertainty have held back investors.
- However, PitchBook says VCs will break their funding record in 2026 for one reason.
Venture capitalists appear to be feeling better about crypto again.
VC funds are on course this year to surpass the $2.6 billion raised in 2023, according to a report from PitchBook.
The data suggests that VC’s appetite for crypto investments is slowly returning after a grinding bear market in 2022 and early 2023, and a spate of regulatory challenges in the US as well as the European Union.
“We anticipate another fundraising peak in 2026, aligning with the next expected major cycle in the crypto market,” Robert Le, senior analyst of emerging technology at PitchBook, wrote in the report, released Thursday.
“The crypto industry has historically followed a four-year cycle,” Le said, “often tied to Bitcoin’s halving events, which have had significant market impacts.”
The halving refers to an quadrennial event where the Bitcoin crypto miners get for verifying the blockchain is dropped by half. The last halving occurred in April.
In 2023, the bottom fell out of the crypto VC fundraising space in the wake of the FTX scandal and the numerous bankruptcies in the market. VC fundraising nosedived almost 90%, to $2.6 billion, and raises fell to 49 from 163.
With just 24 rounds raising $2.2 billion this year, there’s still a long way to go to even approach the giddy heights of a couple of years ago. But stability counts.
“The rebound can be attributed to the overall recovery of the crypto market, in which the total crypto market cap reached 93% of the previous cycle’s watermark in March 2024,” Le said.
Mainstream investors
VCs may also be bolstered by Wall Street’s embrace of Bitcoin as a legitimate asset class worthy of mainstream investors.
BlackRock, Franklin Templeton, Van Eck and other giants issued exchange-traded funds for the top cryptocurrency in January and rapidly attracted billions of dollars.
“While the data only includes closed funds, numerous large funds are actively being raised, which will contribute to larger fundraising totals in the next 12 to 18 months,” Le wrote.
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.