Crypto Market Recovery Triggers Increased VC Funding, Renewed Confidence
As the market enters a crypto bull run, this in turn is triggering positive sentiment with several venture capital investors firms eyeing up new projects to invest in.
The last few years have been followed by scandals and the FTX collapse in the crypto space, but it seems the community is now seeing some light at the end of the tunnel.
Venture capital investment in crypto startups climbed 2.5% to $1.9 billion in Q4 2023, marking the first such rise since Q2 2022, according to recent PitchBook data reports Shalini Nagarajan from Cryptonews.
“After a downturn, signs of market recovery or stabilization has encouraged VCs to invest again. An increase in the interest from institutional investor, capital inflow, and transaction volumes has signaled a healthy recovery phase for the crypto market,” James Wo, Founder and CEO of investment firm DFG told Cryptonews.
There is more positive sentiment during the last quarter of 2023 which was driven by the imminent approval of spot Bitcoin exchange-traded funds (ETFs).
“In regions where regulatory frameworks for cryptocurrencies and blockchain projects become clearer and more favourable, VCs may feel more confident investing,” explains Wo.
For example, regulatory clarity can reduce legal uncertainties and risks associated with investing in the cryptocurrency space.
On February 16, the Ministry of Economy, Trade and Industry (METI) disclosed that the Japanese cabinet has approved a proposal allowing domestic venture capitalists (VCs) to invest in Web3 startups. The legal reform will enable Japanese VCs to participate in projects issuing virtual currencies, previously limited to international investors.
“The Japanese government has recently moved to enable specific VCs to directly invest in
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