Crypto Investments Drop in June
Crypto investments fell to $697 million in June 2024, with notable deals like Robinhood's $200 million acquisition of Bitstamp and Hut 8's $150 million funding.
In June 2024, the crypto market saw a significant decline in venture capital (VC) investments, totaling $697 million. This marks a 30% drop from the $990 million raised in May. Notable transactions included Robinhood's $200 million acquisition of Bitstamp, GRIID's $155 million merger and acquisition (M&A) deal, and Hut 8 Mining's $150 million strategic investment.
VC activity often reflects major investors' confidence in the crypto market. Recent data suggests a cooling period after a particularly active May, though there is still positive growth year over year. RootData reports 92 publicly disclosed crypto VC investments in June, a 40% decrease from May's 153. However, this is a slight increase from the 87 projects recorded in June 2023.
The total fundraising amount in June was $697 million, down 30% from May's $990 million. Despite this month-to-month decline, June 2024 still saw a 42% increase compared to the $480 million reported in June 2023. These fluctuations suggest a maturing market with more selective strategic investments amidst broader economic factors. The distribution of assets across sectors is also shifting, indicating new priorities and trends.
Despite the growing interest in real-world assets (RWA) and decentralized physical infrastructure networks (DePIN), these sectors secured only 6% of the total investments. Decentralized finance (DeFi) led with approximately 20%, followed by NFT/GameFi at 18%. Investments in Layer 1/Layer 2 solutions accounted for 11%, while tools and wallets captured 8%. Artificial intelligence (AI) received around 9%, and centralized finance (CeFi) saw the lowest at about 4%. These figures exclude merger and acquisition deals.
The most significant investment in June was Robinhood’s $200 million acquisition of Bitstamp. This deal aims to enhance Robinhood’s crypto services by integrating Bitstamp’s 50 active licenses and registrations worldwide. It will also enable Robinhood to enter the institutional space with Bitstamp's existing relationships, infrastructure, and products.
“As the world’s longest-running cryptocurrency exchange, Bitstamp is known as one of the most trusted and transparent crypto platforms worldwide. Bringing Bitstamp’s platform and expertise into Robinhood’s ecosystem will give users an enhanced trading experience with a continuing commitment to compliance, security, and customer-centricity,” stated Bitstamp CEO JB Graftieaux.
The acquisition, pending customary closing conditions including regulatory approvals, is expected to finalize in the first half of 2025. Barclays Capital Inc. served as Robinhood’s exclusive financial advisor, while Galaxy Digital Partners LLC advised Bitstamp.
Following Bitstamp, GRIID secured a $155 million M&A deal. CleanSpark announced it would acquire GRIID through an all-stock transaction valued at $155 million, including payments and assumed debt. The company also entered an exclusive hosting agreement, allocating 20 megawatts of power.
Hut 8 received a $150 million investment from Coatue to develop an AI infrastructure platform. This funding will be provided through convertible notes with an 8% annual interest rate and an initial term of five years, with options to extend for up to three more years. Hut 8’s pivot towards AI is not unexpected, as many miners are seeking new revenue streams following the latest Bitcoin halving.
Other notable investments included the modular blockchain project Avail and the rollup deployment platform Conduit, which raised $43 million and $37 million, respectively. Smaller rounds were seen across various sectors, including DeFi, AI, NFT, and GameFi, with companies like M^0, Ora, and Sandbox securing $20 million each.
In summary, June 2024 saw a total of $697 million in crypto VC investments, reflecting a 30% decrease from May but a 42% increase from the same month last year. Despite the decline, strategic investments continue to shape the maturing market, with notable deals like Robinhood's acquisition of Bitstamp and significant funding for companies like GRIID and Hut 8. The evolving distribution of investments across sectors highlights emerging trends and priorities in the crypto industry.
