$2.3B Crypto VC Investment Falls Short Of Bitcoin Price Surge, Here’s Why
Highlights
- Crypto venture capitalists invested about $2.3 billion in the first quarter.
- This investment fell short of the Bitcoin price surge beyond $73,000.
- The reason behind the low VC investment could be the emergence of new market trends.
Crypto venture capitalists have not been keeping pace with the Bitcoin (BTC) price surge lately. Generally, the investment by crypto VCs align with the change in the Bitcoin price, however, that wasn’t the case in the first quarter of FY24. Nonetheless, the venture capitalist investment in crypto has increased significantly.
Crypto VC Investment & Bitcoin Price
According to Galaxy Research data, the venture capitalists invested around $2.3 billion in the crypto market in the first quarter. Whilst, the Bitcoin price witnessed a parabolic surge of beyond $73,000. Considering the historical trends, these institutional investors should have poured in around $14 billion to keep up with the surging BTC price.
Though the crypto VC Investment amount surged from less than $2 billion, the gain wasn’t as high as expected. Earlier, following the all-time high of $69,000 for Bitcoin in November 2021, the venture capitalists splurged $12 billion in the market during the first quarter of 2022.
The potential reason for this dissatisfactory amount of crypto venture capitalist investment could be the new trends in the market. These include the launch of the Spot Bitcoin ETFs, crypto restaking, and uncertainty around the Federal Reserve interest rates.
Moreover, the venture capitalists could have opted to invest in the Spot Bitcoin ETFs instead of choosing to hold BTC directly. However, as of now, these investors are yet to disclose their holdings under the Form 13F filing before the May 15 deadline. Hence, it isn’t confirmed if they actually considered the ETF option or chose to limit their crypto investments owing to market uncertainties.
Also Read: Hong Kong Bitcoin ETFs Accumulate $258M BTC In Debut Week
BTC Price Soars Past $63,000
The Bitcoin price had extended to a low of $56,000 this week and has finally recovered. At press time, the BTC price surged by 8.13% to $63,729.73 on Saturday, May 4. Furthermore, the oldest crypto boasted an impressive market cap of $1.25 trillion.
In addition, the trading volume for Bitcoin jumped 9.48% to $32.07 billion in the last 24 hours. The recent rebound comes amid positive U.S. job data and the resurgence of Bitcoin ETF inflows. On Friday, May 3, for the first time since launch, all Spot Bitcoin ETFs recorded inflows, including Grayscale’s GBTC. Moreover, these ETFs registered an influx of $378 million.
Also Read: Grayscale Bitcoin ETF Ends 77-Days of Outflows, GBTC Inflows Begin
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