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VCs dive back into crypto as EigenLayer, HashKey, and memecoins lead $1.7bn in raises

VCs dive back into crypto as EigenLayer, HashKey, and memecoins lead $1.7bn in raises
Markets
Marc Andreessen is co-founder and general partner of Andreessen Horowitz. The firm's crypto arm, a16z crypto, was among active VCs this quarter.
By
Tyler Pearson
  • This year’s crypto raises have outpaced the previous quarter with over $1.7 billion.
  • Notable raises include Eigenlayer and HashKey, which each raised $100 million.
  • Memecoins are also generating millions from VCs and retail investors — a sign of bullishness not seen since 2017’s ICO craze.

Crypto markets surged in the first quarter of 2024, and with it came $1.7 billion in fresh capital for new crypto projects.

With days left in the quarter, crypto raises have already outpaced the preceding three-month period, which saw $1.58 billion raised.

Fundraising activity can indicate that investors are planning for higher yields over mid- to long-term timeframes, and sentiment is euphoric. Bitcoin is hovering above $70,000 after earlier this month reaching an all-time high of $73,500. The ride to new highs is winning over investors in new crypto projects.

At the top of this quarter’s venture capital heap is the Ethereum restaking protocol EigenLayer and Asia-based digital asset services group HashKey. Each firm raised $100 million in Series A funding rounds.

VC firms making moves include Andreessen Horowitz’s crypto arm, a16z crypto, and OKX Ventures.

Crypto projects raised less than $6.2 billion in 2023 — a far cry from the $22 billion raised in 2022, according to DefiLlama data.

Raises surged in the first quarter of 2024

Memecoins

Memecoins have also driven much of the funds raised in 2024, particularly on the Solana blockchain, where the joke-driven coins surpassed Ethereum in transactions.

Memecoin funding occurs via seed rounds and initial coin offerings, with projects such as MiladyWifHat and SMOLE recently generating as much as $17.6 million and $32.6 million, respectively.

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Seed rounds and ICOs allow investors — including retail investors — to buy into projects before launch.

However, they’re not without risk. Scams and rug pulls have caused millions in losses amid the memecoin frenzy — a trend born during the ICO craze of 2017, which culminated in a market-wide crash in 2018.

One recent example of a seed round snafu involves the launch of the Slerf token. A developer error led to $10 million in losses for seed investors, followed by a massive jump in the token’s price.

Tyler Pearson is a junior markets correspondent at DL News. Got a tip? Email him at ty@dlnews.com.