Bitcoin Pre-Seed Funding Rounds Surge 767% Since 2021

The number of pre-seed funding rounds for Bitcoin (BTC) startup companies has surged by 767% since 2021, according to a report from venture capital firm Trammell Venture Partners (TVP). This significant increase highlights the growing interest and investment in the Bitcoin ecosystem, particularly at the early stages of startup development.

In 2024, Bitcoin pre-seed transactions saw a 50% year-over-year increase, with the number of startup companies funded rising by 27.5% compared to the previous year. This growth can be attributed to the robust security and reliability of the BTC network, which has made it an attractive platform for entrepreneurs. Christopher Calicott, TVP's managing director, noted that many entrepreneurs are revisiting the Bitcoin stack as a long-term foundation for their companies due to its decentralized and secure nature.

Despite the increase in the number of deals, the capital raised in Bitcoin pre-seed funding rounds declined by over 22% in 2024. The median funding round size and the median startup valuation have been steadily declining since 2021. This decline can be attributed to several factors, including unclear crypto regulations in the United States under the previous Securities and Exchange Commission (SEC) leadership and macroeconomic uncertainty due to fears of a prolonged trade war, relatively high interest rates, and the possibility of a recession.

These factors have eroded the risk appetite for speculative assets like crypto, leading to a more cautious approach from investors. The value of funding rounds reclaimed some lost ground in 2024 but failed to reach the highs established during the previous bull cycle in 2021. This indicates that while there is still interest in Bitcoin startups, investors are being more selective and cautious in their investments.

Looking ahead, venture capitalists in the crypto space do not expect 2025 funding to reach the levels seen in 2021-2022. Pro-crypto regulations in the United States could increase VC investment in the sector, but macroeconomic uncertainty and geopolitical turmoil could disrupt this trend. For instance, the signing of a sweeping tariff order by the US President in April 2025 sent financial markets tumbling, affecting risk-on assets such as stocks and cryptocurrencies.

Venture capital firms like Haun Ventures, which invested $1.5 billion into crypto firms in 2022, have announced plans to raise only $1 billion in the first half of 2025, citing changed market conditions. Similarly, analysts at Galaxy Digital predicted a 50% year-over-year rise in VC-led crypto investments in 2025 but noted that funding will likely not reach the highs of 2021-2022. This cautious outlook reflects the current market conditions and the need for a more stable regulatory environment to support sustained growth in the crypto sector.