Cryptocurrency and Blockchain technology venture capital investments saw a significant rise in the first three months of 2024. According to data released today, global venture capital investments exceeded $2.4 billion, indicating a recovery in investor interest. However, uncertainties remain about whether this increase will be permanent.
Investment Volume in Cryptocurrencies and Blockchain Expected to Rise
According to PitchBook’s data, crypto-focused venture capital flows reached a record high in the first quarter of 2022, but experienced a significant decline in the last quarter of 2023. This situation can be interpreted as a reflection of the volatility in the crypto industry and the uncertainty of investors.
PitchBook senior analyst Robert Le stated, “The cryptocurrency industry is still in its early stages and has high growth potential. However, unless there are major market downturns, we expect the investment volume and pace to continue increasing.”
Low Interest Rates and Risk Appetite
The combination of low interest rates and high risk appetite led to explosive growth in the crypto industry in 2020 and 2021. However, the bankruptcies of some major crypto firms in 2022 and the decline in Bitcoin 
$93,619 prices worried investors. Investors supporting the US-based cryptocurrency exchange FTX had to reduce their investments to zero, and various crypto platforms halted withdrawal transactions, causing millions of people to suffer losses.
However, some positive developments occurred last year. The approval of exchange-traded funds tracking Bitcoin’s spot price by US regulators increased investor confidence in cryptocurrencies. Although the steady recovery of Bitcoin prices seemed to create a wave of optimism in the market, uncertainties about the future still persist.
At this stage, the increase in investments in cryptocurrencies may reflect the industry’s potential and investor interest. However, factors such as volatility and regulatory uncertainties continue to create doubts about whether this recovery will be permanent. The future of cryptocurrencies is still shaping up uncertainly, and risks for investors persist. Despite this, we see momentum in investments.
