Crypto Funding Expands With Uncorrelated Ventures’ New Fund; Is Market Back in Black?

Crypto markets have seen a steep decline in funding for the startup ecosystem for two simultaneous years. Despite the harsh backdrop, Salil Deshpande has raised millions for his company Uncorrelated Ventures’ latest fund. According to Bloomberg reports the venture capitalist has raised about $315 million.

VC Salil Deshpande to use funding to help crypto startups

Even with the negative news that the global startup industry has been receiving in recent months, venture capitalist Salil Deshpande has managed to secure $315 million for a new fund for his company Uncorrelated Ventures.

According to Bloomberg reports, about 80% of the funds will be allocated by Palo Alto, California-based Uncorrelated Ventures to early-stage investments in traditional infrastructure software. The remaining 20% of funding is going towards supporting comparable firms in the cryptocurrency space.

Crypto markets see upside in funding

VC funding in the crypto space has seen a change shift in the previous years. The uncertainty and reluctance to invest in crypto-based startups started in 2022 with factors like the FTX collapse, range-bound BTC, and Fed rate hikes contributing to it. However, after two years of struggle, the market is now pricing an upward trend given that dented investor sentiments have recovered.

According to the Bloomberg reports, Deshpande raised the funds with “no difficulty.” Nevertheless, Deshpande acknowledged that he had underestimated the number of prospective investors.

The $315 million funding isn’t the only positive that the market has seen so far this year. Previously, Swiss cryptocurrency bank Sygnum AG had successfully funded 35 million Swiss francs ($41 million) to support the growth and development of the bank. At a $1 billion value, the cryptocurrency exchange HashKey also raised an incredible $100 million earlier this month.

The crypto market sees a downfall in funding, will they recover now?

Crypto venture funds are still having a very hard time raising money. Allocators were discouraged from committing to crypto at the same level as they did in 2021 and 2022 due to the macroenvironment and unrest in the realm of cryptocurrency market infrastructure startups. The number of new cryptocurrency venture capital funds and the amount allotted to them dropped to their lowest point since Q3 2020 in Q4 2023.

According to research, there were the fewest new cryptocurrency venture capital fund openings annually in 2023 compared to 2020. The median fund size decreased by 45% annually, while the average fund size decreased by 30%. For crypto venture capital, 2023 was a difficult year. Venture capital activity continuously reached new lows every quarter, even despite rising liquid cryptocurrency prices.

However, the scenario seems changing now. With the approval of Bitcoin ETF the crypto markets have stood their ground firm. This has not only led to a confidence booster but also a signal of the legitimacy of digital assets. The forthcoming year is expected to give signals of some recovery as the market sees more strength in BTC prices post-Bitcoin Halving.

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