Due to emerging market trends, venture capitalists in the cryptocurrency space were unable to keep up with the price explosion of Bitcoin, which reached around $73,000 in the first quarter of 2024.

Venture investors in the cryptocurrency space have not kept up with the recent spike in the price of Bitcoin (BTC).

In general, cryptocurrency venture capitalists' investments follow changes in the price of Bitcoin; however, during the first quarter of FY24, this wasn't the case. However, there has been a notable surge in venture capitalist investment in cryptocurrency.

Coin VC Investing & Price of Bitcoin

Data from Galaxy Research indicates that in the first quarter of this year, venture capitalists made approximately $2.3 billion in cryptocurrency investments.

In the meantime, the price of Bitcoin saw a parabolic rise that exceeded $73,000. Given past patterns, these institutional investors ought to 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

Bitcoin Price Rises Above $63,000

This week, the price of Bitcoin dropped near $56,000 before eventually rising again.

As of this writing on Saturday, May 4, the price of Bitcoin had increased by 8.13% to $63,729.73. In addition, the oldest cryptocurrency has a remarkable $1.25 trillion market capitalization.

Furthermore, in the previous day, the volume of Bitcoin trades increased by 9.48% to $32.07 billion. Positive U.S. job data and the revival of Bitcoin ETF inflows coincide with the latest upturn.

For the first time since their introduction, all Spot Bitcoin ETFs—including Grayscale's GBTC—saw inflows on Friday, May 3. In addition, these ETFs saw a $378million inflow.