Nearly half of all venture capital (VC) funding in the crypto sector during the fourth quarter of 2024 went to startups based in the US, according to Galaxy Digital’s Crypto and Blockchain Venture Capital report filed on 15 January 2025.
The report revealed that 46% of all capital invested globally was directed to US-headquartered firms, far outpacing Hong Kong, which took the second spot with 16% of the share.
The US also led in the number of deals, accounting for 36% of all VC transactions. Singapore and the UK followed. They captured 9% and 8%, respectively. The findings show the country’s continued dominance in crypto innovation and financing, despite regulatory headwinds.
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US Crypto Dominance Tied To Mature Financial Ecosystem
Ryan McMillin, co-founder and Chief Investment Officer at Australian investment firm Merkle Tree Capital, attributed the US’s leadership to its mature financial ecosystem and deep pool of VC.
He noted that optimism surrounding the upcoming administration of Donald Trump, known for his pro-crypto stance, has fueled a surge in investments.
“There are simply more venture capitalists and limited partners located in the US. The 46% quarter-on-quarter increase for Q4 reflects capital deployment tied to the anticipation of a Trump administration,” McMillin said.
Trump’s inauguration on 20 January 2025 is expected to usher in significant changes for the crypto industry. Hundreds of pro-crypto candidates have also secured seats in Congress, fueling speculation that the US government could become the most crypto-friendly in its history.
Galaxy Digital’s Head of Research Alex Thorn and analyst Gabe Parker echoed this sentiment in their report. Despite the challenges posed by a “hostile regulatory regime,” they anticipate that U.S. dominance will only grow under a supportive government.
“The incoming administration and Congress are set to be the most pro-crypto in history. If regulatory frameworks for stablecoins and market structures are finalized, traditional financial firms could enter the crypto space in earnest,” they stated.
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investors put $3.5bn (+46% QoQ) into crypto startups across 416 deals (-13% QoQ), the biggest dollar amount since Q4 2022, making 2024 the third biggest year for crypto VC ever.
but 2024 was still tricky for VCs.. what does the data show? pic.twitter.com/sTS2mQNWmk
— Alex Thorn (@intangiblecoins) January 16, 2025
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Regulatory Uncertainty Remains An Issue
Regulatory uncertainty, however, remains a hurdle. The Securities and Exchange Commission (SEC) has been aggressive in targeting crypto firms, with its November report citing $8.2 billion in financial penalties for the year ending September 30. Yet, the number of enforcement cases has dropped by 26% compared to the previous year.
As reported, the SEC faces leadership changes as Gensler announced plans to step down on January 20, and Commissioner Jaime Lizárraga is also set to leave before Trump’s inauguration.
Meanwhile, Trump has selected Paul Atkins, a crypto advocate and former SEC commissioner, as his choice to lead the SEC.
He has also appointed David Sachs, a podcaster, as the “Crypto Czar” in his cabinet. He also pledged to make America the “crypto capital of the world” through initiatives like World Liberty’s lending and borrowing platform.
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