Economic, political, regulatory, and technological changes made 2024 a banner year for the cryptocurrency market. These changes drove a flurry of capital back into cryptocurrency assets and resulted in a further flow of venture capital into blockchain and Web3 startups.
Yes, the total amount of venture capital funding represented just a slight increase compared to the amount of funding provided to Web3 startups in 2023. However, among the myriad of reasons driving venture capital investment growth last year, regulatory and technological changes were likely a larger factor than the more financial-based ones.
The 2024 venture capital investment volume may be the prelude to a continued resurgence of investment in this cutting-edge industry. This may explain the current positive sentiment for certain digital assets supporting the Web3 movement. Solana is one of the main cryptocurrencies at the foundation of Web3’s growth. SOL has emerged as a powerhouse that offers speed, decentralization, and high throughput, making it a bedrock piece of Web3’s growth. The result has been mass adoption and market sentiment for this coin. In fact, out of 535 users surveyed on Binance, 46.36% of them are very bullish on SOL’s future price prediction.
VC in Web3: 2024 Overview
According to the Crunchbase Web3 Tracker, which compiles data on venture capital investment in Web3 startups, venture capital funding for such enterprises totaled $7.4 billion during 2024. Most of this capital was committed during the year’s first half, with $1.9 billion invested during Q1 2024 and $2.4 billion invested during Q2 2024.
However, after dropping to just $1.5 billion in Q3 2024, VC investment in Web3 ended the year strong, with a total of $1.6 billion in investments during Q4 2024. Again, the increase in Web3 venture capital investments wasn’t particularly high.
As venture capital funding of Web3 startups totaled $7.1 billion, the $7.4 billion figure referenced above means that funding grew just 4.23% year-over-year. When you consider how major crypto currencies experienced high double-digit, and in some cases triple-digit, percentage price appreciation over this same time frame, it’s hard to get too excited about the latest VC Web3 funding data.
Nevertheless, while a renewed bull market for crypto failed to parlay into a growth bonanza, technological and regulatory factors may have resulted in increased investment in new crypto-based ventures.
Two Key Drivers for Increased Web3 Investment in 2025
While Web3 venture capital investing wasn’t as hot of a trend as other cryptocurrency and blockchain-related trends last year, the blockchain industry’s connections to the fast-growing AI industry may prove key, when it comes to another year of increased investment in Web3 startups.
According to TechCrunch, investments in AI startups increased by 62%, to $110 billion. Even as blockchain-related AI investments likely made up a miniscule portion of this figure, this could change in the coming year, and in the years ahead. Per a recent report from research firm Markets and Markets, the blockchain AI market is expected to be worth $703 million during 2025.
That’s a more than threefold increase compared to the size of the Blockchain AI economy just five years ago. While it’s always possible that the growth of VC investment into the blockchain will decelerate, forthcoming regulatory changes may counter any reduction in AI-related VC investment over the next few quarters.
Assuming the Trump administration lives up to its promises of enacting and implementing a pro-industry regulatory regime for the cryptocurrency and blockchain sector, much-awaited “regulatory clarity” may be just around the corner. This could, in turn, encourage further institutional investment, including venture capital investment, into blockchain and Web3 startups.
Conclusion
Increased VC investment could be one of several factors helping to sustain a continued rally in crypto prices, besides providing a funding bonanza for nascent Web3 startups and blockchain startups.
While not for certain, this might explain why bullishness for cryptocurrencies associated with developer-friendly blockchains like Solana continues to run high.
The jury’s still out, but given the potential for additional progress in areas such as technological innovation and regulatory change, 2025 could be what failed to be for 2024: a banner year for venture capital investment in Web3 startups.
Who knows, the coming year could even bring a return of venture capital funding flows back up to levels not seen since the early 2020s crypto boom.
Photo by Mario Gogh
