Author: Furuhe, Odaily Planet Daily
In 2024, the investment and financing enthusiasm in the crypto field has decoupled from the overall market performance, and VC tokens no longer dominate the market performance.
At the macro level, the crypto market witnessed many historical moments in 2024, including the launch of Bitcoin spot ETF, the launch of Ethereum spot ETF, the clarification of regulatory policies in various countries, the Federal Reserve's announcement of interest rate cuts, and the imminent return of Trump to the White House, all of which had a positive impact, allowing Bitcoin to successfully break through the important $100,000 mark.
From the perspective of the crypto market itself, meme has become the focus of market attention, and different types of meme at different periods have become the driving force for the market's rise. VC projects have performed poorly, and the linear release cycle of tokens has become a chronic "poison" for VC projects.
Under the comprehensive factors, the growth in the number of primary market financing has been relatively large, but the financing amount has been more cautious.
● In 2024, there were 1,295 primary market financing events, with a total disclosed financing amount of $9.346 billion;
● The AI sector has shown its edge, with a surge in financing volume in Q4 2024;
● The largest single investment was $525 million in Praxis.
Note: Odaily Planet Daily has categorized all the projects with disclosed financing (actual close time is often earlier than the announcement) in Q1 into 5 major tracks based on their business type, target customers, and business model: infrastructure, applications, technology service providers, financial service providers, and other service providers. Each track is further divided into different sub-sectors including GameFi, DeFi, NFT, payments, wallets, DAO, Layer 1, cross-chain, and others.
2024 belongs to BTC and meme coins
Reviewing the primary market financing overview of the past three years, an important conclusion can be drawn: In 2024, the investment and financing activities in the primary market have gradually decoupled from the overall crypto market performance, with the market sentiment mainly driven by Bitcoin and the meme sector, while traditional VC projects have performed poorly and can no longer be the core driving force of the market.
From the data analysis, in 2022, which was the peak period of the previous crypto market cycle, the primary market financing activities were highly active, with the changes in volume and amount almost synchronizing with the market performance. In the first quarter of 2022, the financing volume reached 562 deals, with an amount of $12.677 billion. However, as the market entered a downward cycle, financing activities contracted rapidly, with the volume dropping to only 330 deals and the amount decreasing to $3.375 billion in the fourth quarter.
2023 saw a continuation of the bear market effect, with the financing activities in the primary market also performing poorly in line with the overall market. The financing volume and amount continued to decline throughout the year, reaching 232 deals and $1.725 billion respectively in the third quarter, the lowest point in nearly three years. During this period, the primary market was clearly affected by the overall market trend, with market sentiment and capital activity being suppressed.
2024 has become an important turning point for investment and financing activities in the primary market. The data shows that the financing volume has rebounded significantly, with 411 deals in the first quarter, an increase of nearly 69% compared to the fourth quarter of 2023. However, in contrast to the rebound in financing volume, the financing amount has been more cautious, hovering between $1.8 billion and $2.8 billion per quarter throughout the year. This indicates that while capital activity has recovered to some extent, investors are more conservative in capital deployment, further demonstrating the decoupling characteristics of the primary market from the overall market.
In terms of market heat distribution, the crypto market performance in 2024 was dominated by Bitcoin and the meme sector, which is in stark contrast to the previous cycle. In the previous cycle, VC projects were usually the core of market hot spots, while in 2024, VC projects have generally performed poorly and are no longer able to have a substantive impact on the market. This phenomenon has made the primary market performance lose its value as a reference indicator for the overall market performance.
The primary market in 2024 has shown a trend of rationalization and independence. After the frenzy of 2022 and the winter of 2023, investors are obviously more cautious and more focused on the actual quality and long-term value of projects, rather than blindly chasing market hot spots. This change may indicate that the primary market is gradually moving away from the traditional crypto market cycle and entering a new stage of development.
The increase in financing volume and the cautious financing amount reflect that VC institutions are more inclined to diversify their investments and be more conservative in capital allocation. This attitude indicates that the return of market heat has not led to a large-scale influx of capital, but has instead prompted investors to pay more attention to those projects with real potential. In other words, the primary market is no longer just a "follower" of market sentiment, but is beginning to play a role in shaping the future market landscape.
In 2024, the primary market financing volume was 1,295 deals, with a total disclosed financing amount of $9.346 billion
According to Odaily Planet Daily's incomplete statistics, there were 1,295 investment and financing events (excluding fund raising and mergers and acquisitions) in the global crypto market in 2024, with a total disclosed amount of $9.346 billion, distributed across the tracks of infrastructure, technology service providers, financial service providers, applications, and other service providers. The application track received the most financing deals, with 606 deals, while the infrastructure track received the highest financing amount, reaching $3.976 billion. Both of them led the other tracks in terms of financing amount and volume.
As shown in the figure, the application track, as the area closest to end-users in the crypto industry, has always been the focus of the primary market. In 2024, the financing performance of the application track achieved double-digit growth compared to 2023, with both financing volume and amount increasing by about 20%.
The financing performance of the infrastructure track in 2024 was particularly eye-catching. Both the financing volume and amount have increased significantly by more than 50% compared to 2023. Behind this growth is not only the continuous demand for technological infrastructure upgrades in the crypto industry, but also the rise of emerging fields such as AI (Artificial Intelligence) and DePIN (Decentralized Physical Internet Network), which have brought new development opportunities to the infrastructure track.
Overall, the investment and financing activities in the global crypto market in 2024 have shown distinct characteristics, with the application track and the infrastructure track leading in both volume and amount, indicating the market's dual demand for end-user experience and underlying technology upgrades. At the same time, the technology service provider, financial service provider, and other service provider tracks are brewing new opportunities in stable development, especially the financial service provider track, which is expected to see new breakthroughs in 2025 with the entry of mainstream finance.
The AI sector has shown its edge, with a surge in financing volume in Q4 2024
According to Odaily Planet Daily's incomplete statistics, in 2024, the financing events were concentrated in the DeFi, infrastructure, and GameFi tracks, with 289 deals in DeFi, 236 deals in infrastructure, and 160 deals in GameFi.
Looking at the distribution of financing in the sub-tracks:
Throughout 2024, the DeFi and infrastructure tracks continued to maintain stable growth, with the highest total financing volume and number of deals. This indicates that the market's demand for decentralized finance and underlying technology remains strong, whether it is the innovation of new DeFi protocols or the continuous optimization of underlying infrastructure such as multi-chain interoperability and blockchain security, which have become the focus of capital attention.
In comparison, the gaming sector performed impressively in the first three quarters, with a stable ranking among the top three in terms of financing volume, but experienced a significant decline in the fourth quarter, with only 29 projects announcing financing information. This trend reflects the phased weakening of the GameFi hype, and the market is more cautious about its short-term profitability and user growth prospects.
At the same time, the AI sector has rapidly gained popularity and has become a major highlight in 2024. This track has often been developed in conjunction with other fields (such as DeFi and infrastructure) and has not been separately defined. However, starting from the third quarter, the AI sector has gradually stood out, especially in the fourth quarter, with a doubling of both the number and amount of financing. The market has shown a high degree of attention to the application potential of AI+blockchain, and the rise of AI Agents has further ignited the investment enthusiasm of capital in this track.
The largest single investment amount was $525 million for Praxis
From the Top 10 financing list of 2024, it can be seen that although the market environment is volatile, investment institutions still have strong confidence in infrastructure-related projects. The top ten projects are almost all focused on underlying technology and innovative directions, demonstrating the high expectations of institutions for the future development of this track.
L1 public chains continue to attract large-scale financing. On the list, in addition to the established public chain Avalanche completing a $250 million private equity round, emerging projects such as Monad, Berachain, and Babylon have also shown strong growth momentum. These projects have gained the attention of investors through technological innovation and ecosystem expansion.
Praxis is the financing champion on this list, receiving an investment of up to $525 million. However, the specific development direction of this project is still relatively vague, mainly due to its adoption of a DAO organizational form for management, which requires application to enter and limits the disclosure of relevant information.
It is worth noting that Paradigm's dominant position on the list is evident. As a top-tier venture capital firm, Paradigm has led investments in three major projects on the list - Monad, Farcaster, and Babylon.
