In April, investments in cryptocurrency ventures decreased due to a downturn in market sentiment, with both Bitcoin (BTC) and alternative coin prices experiencing lows. This decline in crypto venture capital (VC) investments marked a significant shift from previous positive trends in the market. Data from RootData revealed a notable decrease in the number of crypto VC projects during the initial month of the second quarter, contrasting with earlier optimistic forecasts.

During April, there was a 13.4% reduction in VC investments, with funds being allocated to 124 projects. In the preceding month of March 2024, funds were directed towards 186 crypto projects as investors anticipated the Bitcoin halving event. Despite the recent dip in investments, the figures still show a 23% increase compared to the previous year in 2023.

Top Flows to Monad Labs and Berachain

A total of $1.02 billion in VC funding was distributed across various categories of web3 projects. Monad Labs received a substantial $225 million in funding from a round led by Paradigm, Greenoaks, and Electric Capital. Following closely, Berachain secured $100 million in a Series B funding round, with prominent VC firms such as Brevan Howard Digital, Polychain Capital, Tribe Capital, and Hack VC contributing to the increase in the company's valuation to $1.5 billion.

Auradine emerged third with $80 million in a series B funding round, attracting investments from leading crypto VC firms like Marathon Digital and StepStone Group. The company aimed to enhance its production capacity for mining machines amidst the growing anticipation surrounding the Bitcoin halving event.

Market Dynamics and Reasons for the Decline

The decline in crypto VC funds during the previous month can be attributed to the bearish market outlook, resulting from plummeting asset prices. Post the Bitcoin halving, institutional sentiment weakened due to macroeconomic factors, triggering significant sell-offs in Bitcoin, alternative coins, and meme coins. The first quarter of 2024 witnessed a surge in investments as Bitcoin reached a new all-time high subsequent to the approval of spot Bitcoin exchange-traded funds (ETFs).