By Chris Hollingworth 
The number of pre-seed funding rounds for Bitcoin (BTC) startup companies has seen a significant surge, increasing by 767% since 2021, as revealed in a report from Trammell Venture Partners (TVP), a venture capital firm. In 2024 alone, Bitcoin pre-seed transactions witnessed a 50% year-over-year growth, accompanied by a 27.5% increase in the number of startup companies receiving funding.
Christopher Calicott, the managing director at TVP, attributes this surge in deals to the robust security features of the BTC network. He notes, “Many entrepreneurs across the crypto space are turning back to the Bitcoin stack as the ideal foundation to build their companies. It’s a logical choice given that the Bitcoin blockchain is objectively the most secure, reliable, and decentralized platform available.”
Despite the increase in transaction volume, the capital raised in Bitcoin pre-seed funding rounds experienced a decline of over 22% in 2024. The median funding round size and the median startup valuation have been on a downward trend since 2021, with median valuations for pre-seed Bitcoin startups failing to reach the levels seen in 2021.
The recovery in the value of funding rounds in 2024 did not match the peak levels observed during the previous bull cycle in 2021. This was primarily due to regulatory uncertainties surrounding cryptocurrencies in the United States during the previous leadership of the Securities and Exchange Commission (SEC).
In more recent times, concerns over macroeconomic stability, including fears of an extended trade war, relatively high interest rates, and the looming possibility of a recession in the United States, have dampened the appetite for speculative assets like cryptocurrencies.
The total number of funding deals and unique Bitcoin startup companies has been steadily increasing since 2021, as indicated by data from Trammell Venture Partners. Despite this positive trend, industry experts do not anticipate funding levels in 2025 to reach the peaks seen in 2021-2022.
Looking ahead, Deng Chao, CEO of institutional asset manager HashKey Capital, has expressed optimism that pro-crypto regulations in the United States could lead to increased VC investment in the sector in 2025. However, he cautioned that macroeconomic uncertainties and geopolitical tensions could introduce volatility and disrupt the positive momentum driven by regulatory developments.
Recent market events, such as the imposition of tariffs by former US President Donald Trump and the ensuing trade war fears, have rattled financial markets, leading to a decline in crypto markets. During periods of trade wars and economic uncertainty, investors tend to gravitate towards safer assets like cash, government securities, and stable commodities, abandoning risk-on assets like stocks and cryptocurrencies.
Venture capital firms, including Haun Ventures and Galaxy Digital, have adjusted their investment strategies in response to changing market conditions. While there are expectations of a rise in VC-led investments in the crypto space in 2025, it is unlikely that funding levels will surpass the highs witnessed in 2021-2022.
In conclusion, the cryptocurrency market continues to evolve amidst regulatory developments and macroeconomic challenges, shaping the investment landscape for Bitcoin startups and VC firms alike.
