According to recent research, the interest from venture capitalists in Bitcoin startups has significantly increased, unlike other crypto companies.

Despite a decrease in overall venture capital activity, funding for Bitcoin startups more than quadrupled in 2023, as reported by Trammell Venture Partners (TVP).

TVP's research revealed that the number of pre-seed deals for Bitcoin-native companies increased by 360% last year, with a 56.9% rise in the number of funded startups.

The definition of a "Bitcoin native company" according to TVP is a company whose success is tied to the Bitcoin network and believes in BTC as the future global monetary asset. This excludes late-stage firms, Bitcoin miners, and other crypto-focused companies.

Although the total amount of venture capital invested in Bitcoin decreased by -12.5% to $305 million in 2023, the number of deals rose by 69.2%. In contrast, the crypto industry experienced a decline of -64.5% in funding and -35.3% in the number of deals.

Despite crypto deals outnumbering Bitcoin deals by 20:1, key investors in Bitcoin startups last year included General Catalyst, Y Combinator, and Draper Associates. Tim Draper, a long-time Bitcoin supporter, leads the latter firm.

The report stated that while the venture capital landscape was challenging in 2023, Bitcoin-native startups not only survived but strengthened their position. The outlook for Bitcoin startups looks promising.

The increase in funding for Bitcoin startups aligns with a rise in developer activity on the Bitcoin network due to new technological advancements. Innovations such as the NFT protocol Ordinals, the Bitcoin computing paradigm BitVM, and the upcoming "Runes" protocol have sparked interest.

With a surge in Ordinals activity and rising transaction costs on Bitcoin, developers are seeking to build more efficient layer 2 solutions for the network. The focus on Bitcoin development is attracting more funding and interest from investors.

Nic Carter, co-founder of CoinMetrics, stated that there is currently a significant increase in the number of Bitcoin startups, with activity levels surpassing anything seen before.