Bitcoin’s surge stirs crypto VC from its slumber

livemint.com:

Crypto startups raising capital have been stuck in the mud for much of the past couple of years. They are starting to gain traction now thanks to one of the industry’s key underlying assets: bitcoin. The digital currency’s price has jumped 38% in the past month to $71,010 as of Monday’s market close and has surged 168% over the past six months, according to the CoinDesk Bitcoin Price Index.

Bitcoin is a leading indicator of liquidity in the crypto startup and venture sector and its price swings have historically caused booms and busts in the startup market. The recent rise has meant startups are having an easier time tapping venture firms that were previously on the fence about deals, investors and entrepreneurs say. Fundraising for crypto startups globally rose for the second consecutive month, with startups netting $735 million through Thursday, according to analytics provider CryptoRank.

To be sure, the amount that startups are raising is a far cry from April 2022 when crypto startups raised roughly $7 billion. LevelField Financial is one such company. The Houston-based financial services startup had been trying to raise capital for roughly a year, said Chief Executive Gene Grant II.

Grant said he reached out to roughly 100 venture investors and many returned his calls but didn’t move forward with a deal. Among the reasons, Grant said, were the lagging price of bitcoin, skepticism in the wake of cryptocurrency exchange FTX’s collapse and banking sector turmoil. Then the price of bitcoin jumped.

“In the last couple of weeks people who we thought were dead were chasing us," Grant said. “There has been a sea-change. Everyone feels good about the asset class again." LevelField is now reviewing several offers for a roughly