About half of all venture capital funding in the fourth quarter of 2024 went to cryptocurrency startups headquartered in the United States, and an incoming pro-crypto administration could push that further.
Galaxy Digital’s Crypto and Blockchain Venture Capital report, filed on Jan. 15, found that 46% of capital invested went to startups headquartered in the US, dwarfing the jurisdiction in second place, Hong Kong, which captured 16%.
The US also led the deal count, with 36% of all venture capital (VC) deals involving a company in the US, followed by Singapore with 9% and the UK with 8%.
The US also led the deal count, with 36% of all venture capital deals involving a company in the country. Source: Galaxy Digital
Speaking to Cointelegraph, Ryan McMillin, the co-founder and chief investment officer of Australian crypto investment manager Merkle Tree Capital, said this is primarily a function of the US financial market and innovation sector leading the global pack despite the hostile administration.
“There are simply more venture capitalists and more limited partners located in the US; they also show a significant bump, 46% quarter on quarter for Q4, so a lot of this capital was deployed with the certainty of a Trump administration taking over,” he said.
Trump’s inauguration is set for Jan. 20, with hopes he will deliver on crypto-friendly promises made during his US campaign.
Hundreds of pro-crypto candidates have also won seats in Congress, and industry leaders have suggested that the US government might become the most pro-crypto in history.
McMillin predicts that crypto venture capitalist activity will likely skyrocket this year off the back of a possibly crypto-friendly administration.
“The move from a hostile administration that orchestrated Chokepoint 2.0, weaponized regulators and debanked crypto startups is being replaced by a team that is pro-crypto and well versed in VC, the change will be like night to day, and the market hasn’t even started to price this in,” he said.
“Institutional adoption won’t just stop at Bitcoin and Ethereum, allocators will be looking through the whole spectrum, mid-caps, small caps and VC,” McMillin added.
Related: SEC under Trump could freeze crypto cases not involving fraud: Report
In the Q4 report, Galaxy head of research Alex Thorn and research analyst Gabe Parker said that despite a “remarkably tricky and often hostile regulatory regime,” US companies continued to dominate in Q4.
Source: Alex Thorn
“The incoming presidential administration and Congress are set to be the most pro-crypto in history, and we expect that US dominance will increase, “ they said.
“Particularly if certain regulatory matters solidify as [expected], such as stablecoin frameworks and market structure legislation, which would allow traditional US financial services firms to enter the space in earnest,” they added.
The Securities and Exchange Commission has been at the center of a few hundred lawsuits against crypto firms, with its Nov. 22 annual report showing $8.2 billion in financial remedies for the year ending Sept. 30.
However, the number of cases declined 26% from the previous year to 583.
Magazine: Sex robots, agent contracts a hitman, artificial vaginas: AI Eye goes wild