Quick Facts
The number of pre-seed funding rounds for Bitcoin (BTC) startup companies has grown by a staggering 767% since 2021.
The Rise of Pre-Seed Crypto Startup Deals: What’s Behind the 767% Growth?
In a recent report, venture capital firm Trammell Venture Partners (TVP) revealed that the number of pre-seed funding rounds for Bitcoin (BTC) startup companies has grown by a staggering 767% since 2021. This surge in pre-seed deals has significant implications for the crypto startup ecosystem, and in this article, we’ll delve into the factors driving this growth and what it means for the future of crypto innovation.
The Case for Bitcoin
Christopher Calicott, managing director at TVP, attributed the increase in pre-seed deals to the robust security of the Bitcoin network. He emphasized that many entrepreneurs across the crypto industry are revisiting the Bitcoin stack as the long-term platform to build their companies. This sentiment is echoed by other industry experts, who believe that Bitcoin’s decentralized and secure nature makes it an attractive choice for startup founders.
Economic Uncertainty and Regulation
However, the report also highlighted that the value of funding rounds has declined by over 22% in 2024, with median funding round sizes and median startup valuations steadily declining from 2021 to 2023. This downward trend can be attributed to the lack of clear crypto regulations in the United States, which has led to uncertainty and caution among investors.
In January, Deng Chao, CEO of institutional asset manager HashKey Capital, told Cointelegraph that pro-crypto regulations in the United States would increase VC investment in the sector in 2025. However, he also warned that macroeconomic uncertainty and geopolitical turmoil could increase price volatility and disrupt the trend brought on by positive regulatory tailwinds.
The Impact of Trade Wars and Macroeconomic Uncertainty
The recent signing of a sweeping tariff order by US President Donald Trump has sent financial markets tumbling, and the crypto market has not been immune to the fallout. The fear of a prolonged trade war, relatively high interest rates, and the possibility of a recession in the United States have all contributed to a decline in risk appetite for speculative assets like crypto.
As risk-on assets such as stocks and cryptocurrencies often suffer during trade wars and macroeconomic uncertainty, investors are fleeing risk assets for safer alternatives such as cash, government securities, and durable commodities.
The Future of Pre-Seed Crypto Startup Deals
Given the current market conditions, it’s likely that pre-seed crypto startup deals will continue to grow, albeit at a slower pace. While regulatory clarity and stability are crucial for the sustainable growth of the crypto industry, the recent trade war concerns and macroeconomic uncertainty are likely to maintain a cautious approach among investors.
In this context, it’s interesting to note that some venture capital firms are adjusting their investment strategies accordingly. Haun Ventures, for instance, invested $1.5 billion into crypto firms in 2022 but recently announced that it seeks to raise only $1 billion in the first half of 2025, citing changed market conditions.
Analysts at Galaxy Digital also predicted a 50% year-over-year rise in VC-led crypto investments in 2025 but said that VC funding will fail to reach highs established in 2021-2022.
Pre-seed crypto startup deals grow 767% since 2021! What’s behind this surge and what does it mean for the future of crypto innovation? Read our latest article to find out.
