CB Insights: VC investment in blockchain startups is on pace to decline by ~60% YoY in 2019; as of July 1, blockchain companies have raised $784M via 227 deals
- Venture funding in blockchain startups may tumble 60% in 2019 — Meanwhile, Bitcoin's price has more than doubled this year
Context & Ripple Effects
Blockchain venture funding is retracing a familiar arc: after 2018's peak, when crypto-focused startups raised nearly $3.9B through three quarters, up 280% YoY per CoinDesk, and $1.3B excluding ICOs per Crunchbase, PitchBook counted just $334M in Q1 2019 — below 2018's pace but back in line with 2017. CB Insights' new full-year projection extends that slide.
The striking detail is the divergence: Bitcoin has more than doubled this year while equity checks shrink, echoing the last bust cycle when bitcoin startup funding fell 41% in a single 2015 quarter. The asset price and the startup financing market are clearly moving on different clocks.
First-order effects
- Blockchain startups face a ~60% YoY funding contraction — $784M across 227 deals as of July 1 — forcing the cohort raised at 2018 valuations to stretch runway or exit rather than raise.
Second-order effects
- With ICOs discredited and VC rounds scarce, surviving startups shift toward revenue-generating enterprise blockchain work over token-pegged business models, since the equity market is pricing them like ordinary software companies again.
Third-order effects
- If the pattern holds, crypto venture capital behaves as a boom-bust cycle keyed to prior-year token prices with a lag — consistent with PitchBook's later finding that funding recovered to $2.5B in Q1 2024 after another brutal year — meaning today's survivors are positioned to capture the next upcycle's capital.
The trend: Crypto venture funding moves in multi-year boom-bust cycles that lag Bitcoin's price, with each trough consolidating the sector around fewer, more revenue-grounded startups before the next wave of capital returns.