Bitcoin-Native Startups See 27.5% Funding Increase Despite 22.1% Capital Decline

In 2024, the number of Bitcoin-native startups receiving venture capital investment saw a significant increase, despite an overall decline in the total capital allocated to the sector. According to a report by Trammell Venture Partners (TVP), the number of unique Bitcoin-native companies funded rose by 27.5% year over year, while 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 2023, totaling $234 million for the year. The report focused on early-stage Bitcoin-native software startups, excluding mining operations and atypically large or late-stage funding rounds. TVP defined a “Bitcoin-native” company as one founded on the principle that Bitcoin serves as a foundational global monetary asset and digital cash, with business models aligned to the Bitcoin protocol stack. This emerging category includes startups building infrastructure, applications, and services that leverage the base Bitcoin network or related layers.

The increase in deal count was driven by heightened activity in earlier-stage funding rounds. Pre-seed transactions grew by 50%, while seed-stage deals rose by 30%. Series A transactions also saw a notable 60% increase year over year. This suggests growing interest among investors in backing Bitcoin-native companies from their earliest phases of development despite broader market caution in crypto venture capital.

The divergence between the increased startup funding and lower capital allocation indicates a shift in market trends. Venture firms are spreading investments across a wider range of early-stage companies, potentially favoring leaner rounds and valuation discipline over large, concentrated bets. The median round sizes remained stable across funding stages, though the aggregate capital raised dropped from $301 million in 2023 to $234 million in 2024.

Pre-seed Bitcoin-native transactions increased by more than sevenfold over the four years from 2021 to 2024. The consistent rise in early-stage deal activity positions Bitcoin-native startups as a distinct and increasingly active segment within the broader crypto investment landscape. Although Bitcoin-native startups remain a small portion of the total venture capital funding in the market, they have shown relatively higher momentum. These startups represented 5.98% of overall crypto venture capital invested in 2024 and 2.34% of all venture-backed crypto deal counts.

This compares to Bitcoin’s massive share of the total crypto market cap, which currently stands above 62%. The disparity highlights a continued gap between Bitcoin’s market dominance and its representation in startup investment flows. TVP argued that the Bitcoin-native sector is entering a breakout phase, with four consecutive years of growth across key investment metrics. The report also highlighted that Bitcoin-aligned entrepreneurs are increasingly attracting the interest of prominent investors, including Founders Fund, Ribbit Capital, Accomplice, Valor Equity Partners, Boost VC, Plug and Play, Village Global, GSR Ventures, and Y Combinator. All of these investment funds participated in syndicates for Bitcoin-native deals in 2024.

While overall venture capital allocations to crypto have contracted over the past two years, the Bitcoin-native segment has demonstrated resilience through consistent growth in startup formation and early-stage capital access. The number of Bitcoin-native startups receiving funding increased in 2024 even as the total capital raised fell, reflecting rising investor interest in the category and a shift toward earlier-stage participation. This trend suggests that despite the broader decline in crypto venture capital, Bitcoin-native startups are attracting more attention and investment, particularly in the early stages of development.