Crypto fundraising is seeing ‘signs of recovery:’ PitchBook

Are more token launches coming this fall?

“I think we’re in a new cycle,” PitchBook’s Robert Le told Blockworks.

“In the last six months to maybe even a year, we’ve been in the same cycle in terms of sentiment, increasing capital going into the space and more developers coming and building. So last quarter, I think, maybe there was a little bit of a lull,” he added.

Le’s feeling pretty positive about the fall, and he thinks it’s just a matter of time until projects start announcing more token launches. 

He’s already seen plans for the third and fourth quarters of this year, but there’s currently a “prisoner’s dilemma” where people are trying to figure out “how the market is going to move” so as to time their launches.

Read more: Don’t expect venture capital data to hit 2022 levels for several years: Analyst

“Everyone’s playing the waiting game to see,” he added. Projects would prefer if the market was moving up, but also want to be the first to launch their tokens. But there could be a “tipping point” where the launches happen regardless of an ideal market environment, or we enter a “full force” bull market.

The fourth quarter of last year into the first quarter of this year saw a decent chunk of token launches, but it’s since dried up. Even token unlocks aren’t bountiful, according to data from the Tie Terminal.

The unlocking of $350 million worth of SUI is the biggest unlock over the last month into September, as shown above. 

Read more: Anatomy of a token launch

While Le thinks that we could be gearing up to see a bull market “sometime next year,” which he believes will happen regardless of who takes the White House, he believes the election won’t impact crypto.

Le analogized crypto to an “abused child” in search of love, and notes a candidate like Trump is the first one to give the industry such attention. 

In the end though, “governments don’t like crypto because it’s trying to supplant the traditional financial ecosystem or financial system. It won’t necessarily matter if one party over another supports crypto,” Le said. 

“I think the pragmatic way to interact with regulators and lawmakers is to work with both sides,” Le told Blockworks. “And I think the crypto industry needs to learn to do that.”

Had Trump been in office post-FTX, his administration would have had to crack down on the industry just as hard as the Biden administration and Securities and Exchange Commission’s Gary Gensler have, he added.

Venture capital activity

Speaking of 2022, we’re not anywhere near the venture capital activity that we saw back then, though things are looking up in comparison to last year. 

“As of July 30, 2024, $2.2 billion has already been raised across 24 funds — a sum on track to surpass 2023’s total capital raised. The rebound can be attributed to the overall recovery of the crypto market, in which the total crypto market cap reached 93% of the previous cycle’s watermark in March 2024,” Le wrote in a report.

Per Tie Terminal data, August saw 167 raises totaling $981 million. DeFi projects led the charge, raising $210 million. And the data shows that gaming and metaverse segments are showing an uptick in activity, with $65 million raised last month.

In a report released Friday, Le noted that the median fund size has jumped 76% to $41 million from $25 million last year, with a lot of those being midsized funds (we’re talking $100 million to $500 million). 

This shows that “these funds may represent a sweet spot for crypto investors — big enough to support a growing industry but not so large as to struggle with finding viable opportunities. In an industry still in its relative infancy, $1 billion funds face the challenge of needing to write checks worth $25 million to $50 million, which forces them into high valuations and larger bets in a market where startups of that scale are still scarce,” Le wrote. 

Staying below 2022 levels may actually be a good thing, given that hype isn’t necessarily always a long-lasting thing. 

But while we’re seeing a rebound, “the crypto fundraising environment will stay tough as the market recovers,” Le wrote.

A modified version of this article first appeared in the daily Empire newsletter. Subscribe here so you don’t miss tomorrow’s edition.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.