Cryptocurrency bull run leads to surge in Web3-focused funds

Cryptocurrency market valuations are approaching an all-time high of $3 trillion for the first time since 2021, thanks to the bull run in Bitcoin, ETH, and other cryptocurrencies. Startups looking to build a reputation in the cryptocurrency space are taking this bull phase seriously and flocking to accelerator programs. Subsequently, in the past few weeks, the number of funding pools providing financial assistance to early-stage Web3 startups has also increased.

In a symbiotic relationship, accelerator and investment programs provide Web3 startups with funding, mentorship, and expert industry guidance, while these venture capital firms have the opportunity to own promising emerging companies under their umbrella.

Investment firm Andreessen Horowitz (a16z) was one of the first whistleblowers to highlight cryptocurrency companies flocking to accelerator programs.During the last week of March, venture capital firms claim to own Over $35 Billion in Assets – has released a list of 25 Web3 startups gathering in London to be part of its Spring 2024 Crypto Startup Accelerator Program (CSX).

After considering which startups to bet on, a16z selected 25 startups from 8 different countries including Israel, Japan, Poland, Romania, Switzerland, UAE, UK and US.

“The founders of these 25 companies have ambitious visions, as well as the drive and talent to drive growth in core areas of the crypto ecosystem, including infrastructure, consumer applications, DeFi, payments, gaming, development tools and DePIN,” said Director of Operations Jason Rosenthal a16z Partner at the Cryptocurrency Initiative and Head of Cryptocurrency Startups published an article on X with the names of the selected startups and their areas of expertise.

Over the course of ten weeks, this program at a16z will provide startups with industry-specific resources and mentorship, as well as a common ground for them to explore collaborations with each other.

Currently, the cryptocurrency market is valued at $2.67 trillion (approximately Rs. 22,268,721 crore). Bitcoin hit an all-time high of $73,000 (approximately Rs. 6.08 crore) in March, and many, including financial giants such as Standard Chartered Bank, estimate that the price of Bitcoin will soon reach $100,000 (approximately Rs. 8.3 million).

Blockchain use cases are also booming. Blockchains like Solana, Ethereum, and now Bitcoin are joining new Web3 projects every day, offering better security and scalability as well as better cost-effectiveness than Web2 server systems.

Market analysts predict that Web3 activity will boom in the near future, and more investment firms are expected to launch investment and mentoring programs for Web3-specific projects.

Venture capital firms including Pantera Capital, CoinFund, Spartan Capital and Sfermion launched the Helika Accelerator program last week with Helika, a provider of web3 gaming infrastructure.

“With total venture capital investment in Web3 games expected to be approximately $2.3B in 2023, this vertical is poised to experience tremendous growth in 2024,” Helika co-founder and CEO Anton Umnov said in a statement.

Through the program, startups developing blockchain games leveraging elements of the Metaverse, NFTs, and cryptocurrencies can leverage a studio and a suite of tools to enhance user acquisition, engagement, retention, and growth. Industry participants will also educate selected startups on token economics expertise, chain selection, data analytics, marketing and AI game management.

Web3 Ventures Hack VC is another platform that has launched a massive $150 million (roughly Rs. 1,250 crore) fund to invest in young cryptocurrency and artificial intelligence companies.

The increase in Web3-focused accelerators and investment programs has come as a relief to startups looking to enter the space. In 2022, as the world enters the post-COVID-19 era, banks in many regions around the world have adopted interest rate increases to prevent the economy from entering an inflationary stage. It was then that the cryptocurrency industry, like many other industries, experienced a funding winter. Things are gradually changing.

Total venture capital investment in crypto-related companies in the fourth quarter of 2023 was $1.9 billion, according to data brochure.