US Leads Crypto VC Funding in Q4

In the fourth quarter of 2024, nearly half (46%) of all global venture capital (VC) investments in cryptocurrency startups went to companies based in the United States, according to Galaxy Digital’s Crypto and Blockchain Venture Capital report. The US outpaced all other jurisdictions, with Hong Kong coming in second at 16%. 

The US also led in the number of VC deals, accounting for 36% of the global total. Singapore followed with 9%, and the UK came in third with 8%. Experts believe this dominance is due to the US financial market’s innovation and the availability of more venture capitalists and limited partners within the country.

Trump Administration Expected to Boost Crypto Investments

President-elect Donald Trump, who is set to take office on January 20, has promised to support the crypto industry. Many investors deployed funds in Q4, expecting a more favorable environment under his administration.

Ryan McMillin, co-founder and chief investment officer at Merkle Tree Capital, said that many investors deployed funds in Q4, anticipating a crypto-friendly Trump administration. McMillin believes that the US will see more investment activity as the administration replaces the previous government, which was seen as unfriendly to crypto businesses.

“There are simply more venture capitalists and limited partners located in the US. A lot of this capital was deployed with the certainty of a Trump administration taking over,” McMillin said.

President Trump, set to be inaugurated on January 20, has made crypto-friendly promises during his campaign. Additionally, hundreds of pro-crypto candidates won seats in Congress. This has increased hopes that the government will introduce policies that support the crypto industry.

McMillin predicted that institutional adoption of cryptocurrencies would expand beyond Bitcoin and Ethereum, with investors exploring smaller and mid-cap projects. “The change will be like night to day, and the market hasn’t even started to price this in,” he added.

Regulatory Challenges Persist, But Investment Grows

Despite regulatory challenges, US-based crypto startups maintained their dominance in Q4 2024. The Securities and Exchange Commission (SEC) played a crucial role in the industry, reporting $8.2 billion in financial remedies for the year ending September 30, 2024. However, the number of enforcement cases dropped by 26% compared to the previous year, with 583 cases recorded.

Galaxy Digital’s head of research Alex Thorn and analyst Gabe Parker stated in the report that the incoming administration and Congress are expected to be the most pro-crypto in history. They anticipate that US dominance will grow further, especially if regulatory clarity on stablecoins and market structures is achieved.

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