Crypto startups have attracted more than $1 billion in VC funding since Donald Trump’s election

Crypto startups have raised more than $1 billion in funding from venture capital firms since Donald Trump was elected President, according to data from Defillama. The new data showcases just how Trump’s victory has impacted crypto deal-making.

Defillama data shows that VC funding for crypto startups in November was $796.41 million, while December is already at $511.48 million. Thus, the amount of funds raised by crypto startups in Q4 has already crossed $2 billion, more than the $1.7 billion that startups raised in Q3.

While this marks a resurgence in crypto fundraising per quarter, it remains to be seen whether Trump’s momentum will be enough to make Q4 the biggest quarter for crypto startups in 2024. So far, Q1 has seen the biggest fundraising at $2.85 billion. Whether Q4 will beat that mark remains uncertain, but it looks to be on track.

Nevertheless, VC interest in crypto remains low compared to the peak in 2022. Crypto startup fundraising peaked at $11.22 billion in Q1 of 2022. Since then, interest has declined due to the crypto industry’s struggles, including regulatory challenges.

VCs bullish in expectation of regulatory clarity 

The rise in crypto funding is not completely surprising. It started in October and mirrors the general reaction of the crypto industry, first to the likelihood of Trump winning and, after the election, to his victory. With prices pumping and Bitcoin crossing $100,000, VCs are bullish on the crypto industry again and look forward to investing.

This positive sentiment is fueled by the expected regulatory clarity that many believe the Trump administration will bring to the industry. With Trump already replacing the Securities Exchange Commission (SEC) chair Gary Gensler with a pro-crypto nominee and several pro-crypto people expected to join his cabinet, many believe the administration will allow the industry to thrive.

Even crypto founders, including Solana’s co-founder Anatoly Yakovenko, have called on crypto startups to move to the US for the upside. Coinfund managing partner Chris Perkins also noted that regulatory overhaul will increase the number of startup deals.

Perkins said:

“It’s going to be a lot of cleanup. … People don’t realize how big a deal regulatory derisking is. It’s the biggest impediment to institutional adoption.”

VCs are interested in other high-potential crypto sectors, such as tokenization, DeFi, stablecoins, infrastructure, and AI, which they consider the most attractive. Meanwhile, a few concerns remain about the Trump administration and whether he could achieve all his promises.

This is not the first time that VCs and traditional finance have shown strong interest in the crypto sector, but many believe this episode will be different. For one, Trump appears very committed to achieving his pro-crypto plans and has a willing Congress backing him.

Still, there are concerns that reality could fall below expectations.

Avalanche and OG Foundation’s $250M raises lead Q4 deals 

Meanwhile, Layer-1 blockchain Avalanche is still the biggest raiser of Q4, receiving $250 million in a private, locked token sale led by Galaxy Digital, ParaFi Capital, and Dragonfly. Over 40 firms were involved in the token sale.

Crypto-AI startup OG Foundation also raised $250 million in November in a token presale, while the affiliated developer OG Labs also raised $40 million in seed funding led by Hack VC, Delphi Digital, OKX Ventures, and Samsung Next.

Beyond these two, most of the fundraising in this quarter has been for below $40 million, with Trump-backed World Liberty Financial raising $30 million, Klickl with $25 million, USDX Money with $45 million, and StakeStone with $22 million.

Projects attracting investment fall into AI-crypto, real-world assets (RWA), DeFi, L1 and L2 networks, DePIN, and payments.

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