Bitcoin
$2.3 Billion Crypto VC Investment Falls Short of Bitcoin Price Rise, Here’s Why
Crypto Venture Capitalists Have Not Keeping Pace Bitcoin (BTC) Price increase lately. Generally, investment from crypto VCs aligns with the change in the price of Bitcoin, however, this was not the case in the first quarter of fiscal year 2024. However, venture capital investment in crypto has increased significantly.
Crypto VC investment and Bitcoin price
According to data from Galaxy Research, venture capitalists invested around $2.3 billion in the crypto market in the first quarter. Meanwhile, Bitcoin price witnessed a parabolic rise of over $73,000. Considering historical trends, these institutional investors should have invested around $14 billion to keep up with the rising BTC price.
Although the value of crypto venture capital investment increased from less than $2 billion, the gain was not as high as expected. Previously, after Bitcoin’s all-time high of $69,000 in November 2021, venture capitalists spent $12 billion on the market during the first quarter of 2022.
The potential reason for this unsatisfactory amount of crypto venture capital investment could be new market trends. These include the launch of Spot Bitcoin ETFscrypto reset and uncertainty surrounding Federal Reserve interest rates.
Furthermore, venture capitalists could have chosen to invest in Spot Bitcoin ETFs instead of choosing to hold BTC directly. However, as of now, these investors are yet to disclose their holdings under Form 13F before the May 15 deadline. Therefore, it is not confirmed whether they actually considered the ETF option or chose to limit their crypto investments due to market uncertainties.
Read too: Hong Kong Bitcoin ETFs Rack Up $258 Million BTC in Debut Week
BTC price surpasses $63,000
Bitcoin price hit a low of $56,000 this week and has finally recovered. At the time of this publication, the BTC Price rose 8.13% to $63,729.73 on Saturday, May 4th. Furthermore, the oldest crypto boasted a staggering market cap of $1.25 trillion.
Additionally, Bitcoin trading volume jumped 9.48% to $32.07 billion in the last 24 hours. The recent rally comes amid positive US jobs data and a resurgence in Bitcoin ETF flows. On Friday, May 3, for the first time since launch, all Spot Bitcoin ETFs recorded inflows, including Grayscale’s GBTC. Furthermore, these ETFs registered an inflow of 378 million dollars.
Read too: Grayscale Bitcoin ETF Ends 77 Days of Outflows, GBTC Inflows Begin