TLDR:
- Bitcoin-native startups saw a 27.5% increase in funding deals despite 22.1% decline in total capital ($234M) in 2024
- Pre-seed transactions grew by 50%, seed-stage by 30%, and Series A by 60%
- Bitcoin-native pre-seed transactions increased by 767% over four years (2021-2024)
- Bitcoin startups represent only 2.34% of crypto venture deals despite Bitcoin’s 62% market dominance
- Major investors including Founders Fund and Y Combinator participated in Bitcoin-native funding rounds
Bitcoin-native startups are experiencing a surge in venture capital interest, particularly at the early stages, according to new data from Trammell Venture Partners (TVP). This growth comes despite an overall decline in total capital allocated to the sector in 2024.
The number of unique Bitcoin-native companies receiving funding increased by 27.5% compared to 2023. At the same time, the number of individual transactions grew by 31.8%.
However, the total amount of capital raised across these deals fell by 22.1% compared to the previous year. The sector raised $234 million in 2024, down from $301 million in 2023.
Early-Stage Funding Explosion
The increase in funding deals was primarily driven by heightened activity in earlier investment rounds. Pre-seed transactions grew by an impressive 50% year-over-year.
Seed-stage deals also saw healthy growth, rising by 30%. Perhaps most telling was the 60% increase in Series A transactions, indicating startup maturation within the ecosystem.
This pattern suggests growing investor confidence in backing Bitcoin-native companies from their earliest phases. This is happening despite broader market caution in crypto venture capital.
The report from TVP focused specifically on early-stage Bitcoin-native software startups. It excluded mining operations and unusually large or late-stage funding rounds.
TVP defines “Bitcoin-native” companies as those founded on the principle that Bitcoin serves as a foundational global monetary asset. These are businesses with models aligned to the Bitcoin protocol stack.
Four-Year Growth Trajectory
Looking at longer-term trends, the growth becomes even more striking. Pre-seed Bitcoin-native transactions increased by 767% over the four years from 2021 to 2024.
During this same timeframe, Bitcoin startups collectively raised approximately $1.2 billion. This consistent rise in early-stage deal activity positions Bitcoin-native startups as a distinct and increasingly active segment within the broader crypto investment landscape.
“Many entrepreneurs across crypto are revisiting the Bitcoin stack as the long-term place to build their companies,” said Christopher Calicott, managing director at TVP. “It makes perfect sense. The objectively most secure, reliable, and decentralized blockchain is the obvious platform of choice.”
The Bitcoin-native sector appears to be entering a breakout phase. It has now shown four consecutive years of growth across key investment metrics.
Untapped Potential
Despite this growth, Bitcoin-native startups remain a surprisingly small portion of total venture capital funding in the crypto market. According to TVP’s data, these startups represented just 5.98% of overall crypto venture capital invested in 2024.
Even more striking, they accounted for only 2.34% of all venture-backed crypto deal counts. This stands in stark contrast to Bitcoin’s massive share of the total crypto market capitalization, which currently exceeds 62%.
This disparity highlights a continued gap between Bitcoin’s market dominance and its representation in startup investment flows. It may also signal untapped potential for future growth in this sector.
The shift in investment patterns shows venture firms are spreading investments across a wider range of early-stage companies. They appear to be favoring leaner rounds and valuation discipline over large, concentrated bets.
Median round sizes remained stable across funding stages. This suggests the drop in total capital wasn’t due to smaller individual investments but rather a shift toward earlier-stage companies.
Bitcoin-aligned entrepreneurs are attracting interest from top investors. The report noted participation from Founders Fund, Ribbit Capital, Accomplice, Valor Equity Partners, Boost VC, Plug and Play, Village Global, GSR Ventures, and Y Combinator in Bitcoin-native deals during 2024.
TVP, an Austin-based venture capital firm founded in 2016, specializes in early-stage Bitcoin startup investing. Its portfolio includes companies like Voltage, which provides Lightning Network infrastructure, and Fedi, a Bitcoin “superapp” offering chat, money, and other social features.
While overall venture capital allocations to crypto have contracted over the past two years, the Bitcoin-native segment has demonstrated resilience. The sector continues to show growth in startup formation and early-stage capital access despite market headwinds.
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