Author: Rootdata
Abstract
Q2 2024 saw Crypto financing reach $2.75 billion, up 38.9% YoY. The SocialFi notably surged, with a 650% QoQ increase. Bitcoin spot ETFs witnessed a net inflow of $2.394 billion in Q2, an 80% drop in QoQ, with a 12.4% decrease in AUM.
Mid to late-stage funding rounds in Q2 increased 20.7% QoQ, potentially indicating institutions’ preference for strategic large-scale investments as markets stabilize. Animoca Brands led with 36 investments. Top 10 institutions increased GameFi investments by 71% QoQ.
Paradigm announced the completion of an $850 million fundraising round, marking the largest fundraising event of Q2 and the first half of 2024. During the bull market that began at the end of 2023, the total amount raised by crypto funds was more than ten times lower than during the previous bull market, with BTC prices no longer driven by inflows from crypto funds.
Search volumes for projects with high FDV and low circulation peak just before their TGE, then plummet dramatically. Binance Token Listing Competition Intensifies: Launchpool projects have an average valuation of $217 million, with an institutional hit rate of less than 2%, and over 30 major projects are expected to conduct their TGE in Q3.
I. Q2 2024 Funding Reaches $2.75B, Up 38.9% YoY; SocialFi Surges 650% QoQ.
Bitcoin experienced significant volatility in Q2 2024, peaking at $71,630 on April 8, then falling to $58,300 on May 1. By June 30, BTC was down 13% for the quarter. Spot ETF inflows totaled $2.39B, down 80% QoQ, with AUM at $51.13B, down 12.4% QoQ. Despite market complexity, Crypto's primary market funding remained strong. According to RootData, there were 418 financing events in Q2 2024 in the Crypto primary market, totaling $2.75 billion, a 38.9% increase year-over-year.
According to RootData, the top three financing tracks in Q2 were infrastructure, DeFi, and social. Infrastructure financing reached $1.016 billion, a 145% increase in QoQ. Notably, the SocialFi surged, with financing hitting $227 million, a 650% rise QoQ, and a 261% increase YoY.
The robust performance in Infra was linked to substantial funding for multiple L1 and L2 projects, such as Monad with a $225 million raise and Berachain with $100 million. In DeFi, there were 56 million-dollar-level financings, primarily in seed rounds, indicating a surge in emerging projects. The explosive growth in SocialFi was largely due to projects like Farcaster, which successfully balanced technological innovation with user experience while cultivating a high-quality, low-noise community culture. This innovative model may address the sustainability issues of early SocialFi projects and provide new avenues to attract a broader user base, thereby fueling rapid development and significant investment inflow into SocialFi.
II. Mid to Late-Stage Funding Rounds in Q2 Increase by 20.7% Quarter-on-Quarter, Top 5 Funding Amounts Increase by 81.25%.
In Q2, the number of early-stage investments (below $5M) was 160, a slight decrease QoQ, while mid-stage investments ($5M-$10M) totaled 79, up 61.2% YoY. Late-stage financing reached 146, an increase of 20.7% QoQ. This trend may reflect a market stabilization and preparation for an anticipated next market surge, with VCs potentially favoring opportunities that allow for short-term exits.
The top five financed projects in Q2 2024 collectively secured $725 million, up 81.25% from Q1. Leading these was Monad, with a $225 million round led by Paradigm. Notably, Farcaster secured $150 million in financing at a $1 billion valuation, a significant rebound from SocialFi’s overall low financing in Q1, where disclosed financing amounts totaled only about $70 million. Additionally, Berachain’s B round in April 2024 valued the project at $1.5 billion, representing a 257% valuation increase within a year.
III. Top 10 Most Active Institutions in Q2 Increase Total Investments by 2% Quarter-on-Quarter, Animoca Brands Leads with 36 Investments.
Real-time Investors On-chain Holdings: OKX Ventures; HashKey Capital; The Spartan Group
According to RootData, the top 10 investment institutions participated in 202 investment events in Q2 2024, marking an approximate 2% increase QoQ. OKX Ventures led with 30 investments in Q1, although this decreased to 25 in Q2, it remained highly active. Infra continued to be the most popular category, with these top institutions making 81 investments, accounting for about 40% of their total Q2 investments.
In GameFi, the top 10 institutions made 53 investments, a 71% increase from Q1. This explosive growth may stem from the shift in projects from simple “play-to-earn” models to more complex and attractive gaming experiences. This transformation not only enhances game quality and user experience but is crucial for maintaining the sustainability of the economic model. In contrast, the less innovative DAO and NFT continued their sluggish performance from Q1.
IV. Crypto Venture Capital Funds Raise $1.38 Billion in First Half of the Year, Investors Favor Caution and Compliance, Bitcoin Continues Independent Rise.
Public data since 2015 reveals that there have been 177 fundraising events in crypto, amassing over $39.6 billion in total funds raised. The influx of substantial external capital fueled the bull market surge from 2021 to 2022, leaving behind numerous projects with high valuations, such as StarkNet and zkSync.
While the pace of capital inflows has slowed in the past two years, it remains significantly higher than in 2020 and shows an upward trend. In the first half of 2024, crypto funds have completed fundraising totaling $1.38 billion, with Paradigm announcing on June 13 its $850 million raise, marking the largest fundraising event of Q2 and the first half of 2024.
During the bull market rise that began at the end of 2023, the total amount raised by crypto funds was more than ten times lower than in the previous bull market. Bitcoin is no longer driven by inflows into crypto funds. This could be due to traditional high-net-worth individuals being more cautious, investing in cryptocurrencies through compliant avenues like ETFs, and fearing becoming the buyers in the last round of the bull market exodus, thus driving Bitcoin’s unique rise.
V. Q2 Project Hot Search Review: Airdrop Season Arrives as Scheduled, High Valuation and Low Circulation Models May Suppress Token Performance
In Q2, Bitcoin fluctuated between $57,000 and $72,000, during which many high-profile projects chose this window to conduct their TGEs, including Wormhole, io.net, zkSync, Layerzero, and Blast. Among the 12 projects that underwent TGEs and were most searched in Q2, it was found that the search volume peaked just before the TGE and then dramatically declined. Additionally, the level of attention these projects received was significantly influenced by Bitcoin prices, closely related to confidence in the crypto market.
Many high-profile projects are marked by a “high valuation, low circulation” aura. According to RootData, the average valuation for Binance Launchpool and OKX Jumpstart projects over the past three years was $217 million and $373 million, respectively. Furthermore, for projects with an FDV under $1 billion that have not been listed on Binance, only just over 30% did not experience a reversal in primary and secondary market valuations.
Between 2021 and 2022, a substantial amount of capital flooded into the private markets, adopting aggressive valuation strategies under optimistic market sentiments, and many crypto funds blindly opted for high-valuation investment strategies. However, these projects failed to demonstrate sustainable business models. Additionally, the liquidity contraction brought about by US interest rate hikes also impacted the crypto market, which might be one of the external reasons investors are hesitant to buy new tokens.
VI. Binance Token Listing Competition Intensifies, Over 30 Major Projects Expected to Conduct TGE in Q3
RootData has released a list of projects expected to conduct their TGE in Q3, which includes 30 high-profile projects with large funding and high FDV, such as Monad, Fuel, Scroll, and Succinct. These projects are highly likely to be listed on Binance.
An analysis of the portfolios of 288 investors revealed that the average number of Binance Launchpool projects in their portfolios does not exceed 2%. Of about 30 Binance Launchpool projects, 21 were invested in by Binance Labs, accounting for more than 11% of their investment portfolio.
Due to Binance’s competitive advantages in trading depth and slippage, as well as competitive funding rates, Binance’s intense competition for token listings has a profound impact on the market. Projects choosing to conduct TGE on Binance can effectively leverage its market advantages and platform resources, laying a solid foundation for long-term development.
VII. Core Crypto Brands Across Exchanges, Underlayer Blockchains, Media, and Tools; X Rankings Enhance Alpha Discovery and Align with Investor Sentiment
RootData has launched the X Influence Index, which conveniently showcases the most influential crypto projects, with the core 12 projects distributed across four key areas:
Exchanges: Coinbase, Binance, Uniswap
Underlayer Blockchains: Bitcoin, Ethereum, Solana, Polygon
Crypto Media: CoinDesk, The Block, Cointelegraph
Analysis Tools: CoinMarketCap, Messari
The X Hot Index, as a market dynamics observation tool, is closely linked to X platform data, quickly attracting many potential Alpha projects and is frequently updated. It has become an important window for investors to understand market sentiment, with the hotness value showing a declining trend in Q2:
April: Optimistic market sentiment with high project activity
May: Market fluctuations, investors’ cautious attitude
June: BTC rebound failed, market liquidity decreased, Index dropped to a low point
Download Full Report:
EN: Crypto Investment Research Report Q2 2024
VI: Báo cáo đầu tư Web3 Q2 2024
Declaration
This report is produced by RootData Research and the information or opinions expressed herein do not constitute investment strategies or recommendations for anyone. The materials, opinions, and speculations contained in this report only reflect RootData’s judgment on the day of the report’s publication, and past performance should not be used as a basis for future performance. At different times, RootData may issue reports inconsistent with the information, opinions, and speculations contained in this report. RootData does not guarantee that the information contained in this report remains up-to-date, and reliance on the information in this material is at the reader’s discretion. This material is for reference only.
About RootData
RootData is a Web3 asset discovery and tracking data platform that pioneers in encapsulating on-chain and off-chain data of Web3 assets, aiming to become a productivity tool for Web3 enthusiasts and investors with its high data structuring and readability.
Website：www.rootdata.com
