The crypto media outlet Coinstack recently released its comprehensive research report, "The Crypto VC List 2023," which provides an in-depth analysis of 300 venture capital firms focused on the cryptocurrency sector. The report offers valuable insights into the scale, investment activity, and geographic distribution of these key market players.
According to the findings, the total capital managed by the top 300 crypto VCs amounts to $83.9 billion. Among these, the top 50 firms manage a combined $59.6 billion, with 71% of these funds based in the United States. This indicates that the U.S. continues to dominate the primary market for cryptocurrency investments.
Largest Crypto VCs by Fund Size
Nineteen venture capital firms in the crypto space manage funds larger than $1 billion. The top five firms, ranked by fund size, are:
- A16Z Crypto
- Binance Labs
- Multicoin Capital
- Pantera Capital
- Paradigm
These firms have established themselves as giants, providing significant capital to shape the future of the blockchain ecosystem.
Most Active Crypto VCs by Number of Investments
When ranked by the total number of historical investments, the list of top investors looks different. The five most active firms are:
- Coinbase Ventures
- Digital Currency Group (DCG)
- NGC Ventures
- AU21 Capital
- Animoca Brands
This highlights a distinction between those with the largest war chests and those who have been the most prolific in backing new projects.
Most Active VCs in the Past 12 Months
A more recent look at activity over the past year reveals a shift in momentum. The report identified a new cohort of highly active firms that differ from the historical leaders. The top five most active crypto VCs in the last 12 months were:
- Big Brain Holdings
- Shima Capital
- Infinity Ventures Crypto
- GSR
- MH Ventures
This suggests that the landscape is dynamic, with new players aggressively deploying capital despite market conditions.
Trends in VC Investment Activity
An analysis of quarterly investment data from Pitchbook shows that crypto VC activity peaked in the first quarter of 2022, with over $11 billion in new capital invested. Since that high point, activity declined significantly, dropping to just $2.5 billion by the fourth quarter of 2022.
The first quarter of 2023 saw a further dip to approximately $1.8 billion. However, the report notes a promising rebound in February 2023, with $872 million in venture capital invested in crypto/blockchain companies. This represents a 52% increase from the $574 million invested in January 2023, suggesting that VCs may be beginning to allocate capital for the next market cycle.
👉 Explore current investment trends
Comparing Funding Rounds: 2022 vs. 2023
The report also compared median fundraising amounts and valuations between 2022 and 2023. The data shows that for Seed and Series B rounds, the median raise and valuation increased in 2023 compared to the previous year. In contrast, Series A rounds experienced a decline.
It is important to note that the sample size for 2023 data was relatively small at the time of the report, so these comparisons should be viewed as preliminary indicators rather than definitive trends.
Resilience and Growth in a Bear Market
A key conclusion from the report is the resilience of the crypto venture capital market. Compared to the bear market of four years ago (January/February 2019), the amount of risk capital invested in companies in early 2023 was 3.1 times greater. This means that even in the current downturn, there is three times more liquidity available than in the previous crypto winter.
Coinstack's report ends on an optimistic note, stating:
"The crypto VC capital market has not only survived but is thriving compared to past downturns and is poised for a major recovery in 2024/2025."
This sentiment points toward a strong foundation for future growth, driven by experienced investors and substantial available capital.
Frequently Asked Questions
What is a crypto venture capital (VC) firm?
A crypto VC is a fund that invests its capital into early-stage blockchain and cryptocurrency companies. They provide funding in exchange for equity or tokens, helping new projects develop and grow.
Which country has the most crypto VCs?
The United States is the dominant hub, with 71% of the top 50 crypto VCs based there. This gives it a significant influence over the global crypto investment landscape.
Why is there a difference between the largest and most active VCs?
A firm can be "largest" based on the total capital it manages, while "most active" refers to the number of individual investments it makes. Some large firms may make fewer, larger bets, while active firms might make numerous smaller investments.
Did crypto VC investment increase in 2023?
After a significant decline from its late-2021 peak, the data showed early signs of a rebound in February 2023, with investment increasing by 52% from January. This suggests potential renewed optimism among investors.
What was the peak of crypto VC investing?
Investment activity reached its highest point in Q1 2022, with over $11 billion of new capital invested. The market cooled considerably throughout the rest of the year.
Is now a good time for startups to seek funding?
Although the market is more selective than during the bull run, the report indicates that substantial capital is available—three times more than in the 2019 bear market. This creates opportunities for strong projects with solid fundamentals. For those building in the space, 👉 discovering strategic funding insights is a crucial step.