New findings from Galaxy Research, a crypto insights firm, reveal that venture capitalists have made significant investments in the digital assets industry during the first quarter of this year.

According to Galaxy Research’s latest article, venture capitalists injected a total of $2.49 billion into cryptocurrencies in Q1 of 2024, marking a 29% increase compared to the previous quarter.

The analytics platform suggests that the substantial investments made in Q1 of 2024 may indicate that the market bottomed out in Q4 of 2023.

“In Q1 2024, venture capitalists invested $2.49 billion (+29% QoQ) into crypto and blockchain-focused companies across 603 deals (+68% QoQ). This rise in capital invested and deal count after three quarters suggests that Q4 2023 may have been the ‘bottom,’ but further increases in the coming quarters would confirm this.”

Source: Galaxy Research

Galaxy Research further points out that while venture capitalist investments in the crypto space have historically aligned with the price of Bitcoin (BTC), the recent surge in Bitcoin’s value in 2024 has caused a decoupling effect.

“Although venture capital investment in the crypto sector has typically correlated with the price of Bitcoin, this correlation has broken down over the past year. Despite Bitcoin’s significant rise since January 2023, VC activity has mostly remained stagnant. While Q1 2024 witnessed a notable increase in BTC, the investment activity is still far from the levels seen when Bitcoin last traded above $60,000. The combination of crypto industry-specific catalysts and macroeconomic headwinds contributed to this significant divergence.”

Source: Galaxy Research

As of the time of writing, Bitcoin is trading at $62,754, reflecting a 5.2% increase in the past 24 hours.

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