Financing data has dropped to freezing point, is the encryption market out of touch with Bitcoin?

Recently, the rise of Bitcoin has detonated the FOMO point in the crypto community. Its price has yet to show signs of correction after breaking through $60,000 again after 829 days, and continues to rise to $68,000. At the time of writing, Bitcoin price remains above $66,000, according to TradingView data.

Up to $68,000 in bits The currency only needs to rise another 1.2% to hit a new all-time high from 2021. Bitcoin’s strong rise has caused unlimited FOMO in the community. According to Alternative data, the panic and greed index is also rising, reaching 90 for the first time since February 2021. The market has fallen into extreme greed.

Announced funding falls to 2020 lows

While Bitcoin price rises Paying attention to venture capital may be one of the ways many people choose their own targets in a bull market, and they are usually regarded as market leaders.

In fact, venture capital institutions have indeed followed the rise in the price of Bitcoin and launched more projects, especially during the first two rounds of bull markets, BTC There is a clear positive correlation between price and the amount raised by venture capital institutions.

BTC and fundraising amount Chart, source: @DefiIgnas

What is interesting, however, is that even though BTC has recovered from the low in 2022 and is even higher than the peak of the bull market in 2018, the amount of financing has continued to decline, returning to the level before 2020.

According to community member statistics, total crypto fundraising announced in February 2024 reached $726.8 million, coming from 134 companies and 497 independent investors. Among these financing projects, DeFi accounted for the highest proportion of investment, with a total of 31 investments, accounting for 23.1% of the total amount raised. Infrastructure performed best in terms of funding, attracting a total of $294.4 million in investment, accounting for 40.5% of total funds raised.

In such a hot market, the amount of financing announced last month was only US$486 million. Although it increased by 20.4% from January, it was 28.7% lower than in February last year. %.

Source: @DS_Blockchain

Why? so?

Judging from the development of the previous two bull markets, although many Asian venture capital companies value the opportunities in the bear market and prefer to take action during the bear market cycle, judging from the overall performance , venture capital firms do tend to invest based on market trends.

Nowadays, the investment amount and the rise of Bitcoin are obviously developing in opposite directions. The reason is that this round of bull market was triggered by Bitcoin ETF, and one belongs to Bitcoin. bull market.

ETF funds disrupt the pace of project announcements

If you look at the logic of venture capital investment, Since the failure of the Inscription market, venture capital and private equity investment firms have not researched and invested in strong fundamentals with huge future cash flow potential, but have only followed trends and FOMO investment methods to find future financing rounds.

For the team, after the project raises funds during the bear market, the financing status will not be announced immediately. So if you just look at the data, it may not be up to date. Normally, project parties would choose a time to make an announcement when it makes more sense to them.

So, what is a more meaningful time?

Since last year, the approval of Bitcoin ETF has been a catalyst for the crypto market, especially since January 11. The approval of ETF has undoubtedly made Bitcoin Coins and cryptocurrencies have entered a new starting point in history. As the most anticipated development in the global cryptocurrency market, every move of the spot Bitcoin ETF extremely controls this already fragile market.

For a project, there is a certain process for announcement. Now, two months have passed since the ETF was approved, and the price of Bitcoin seems to be completely unfavorable to the market. Opportunity to react.

According to Tradingview, the Bitcoin price curve has been on an upward trend as early as late September last year. The amount of financing announced at this time was still within expectations, but After Bitcoin started to rise, the amount of financing did not change significantly. Even in January, there was still not much improvement after the adoption of ETF. It can even be said that since January, the upward trend of Bitcoin has become more violent, while the amount of financing has begun to fall instead of rising.

Whether it is a venture capital investment or a project announcement, It can be said that the Bitcoin ETF has indeed disrupted the pace of all participants. For the project side, this "more meaningful time" seems impossible to accurately grasp.

ETF funds are not flowing into the crypto industry?

On February 29, the single-day trading volume of the Bitcoin spot ETF reached US$7.69 billion, setting a new historical record since its release. In the following days, the overall volume remained at 7.69 billion US dollars. 4 billion-5 billion level. Strong inflows into Bitcoin spot ETFs in less than two weeks have pushed Bitcoin prices closer to all-time highs.

From a capital perspective, the capital flow in the entire crypto market has undoubtedly increased. The passage of the Bitcoin ETF is not only making waves in the crypto industry, the entry of traditional old money is also helping the price of Bitcoin soar, but most of the funds actually just flow to Bitcoin.

According to coinmarket data, the current total market value of cryptocurrency reaches 2.38 trillion, with a 24-hour increase of 2.79%. Among them, the price of Bitcoin was US$66,557, a 24-hour increase of 1.46%, with a market value of 1.3 trillion, and a market share of more than half of the entire crypto market value, reaching 51.17%.

Bitcoin prices keep rising , but the price of altcoins remains unchanged or even falling. Many people believe that the funds flowing into the Bitcoin spot ETF will not flow to the altcoins on the market, but will be cashed into US dollars, so there will be no altcoin bull market in this round.

Related reading: "Bitcoin is about to hit a new high, why don’t I make any money? 》

Under such a situation of attracting money, it is difficult for the rest of the crypto market to stand out. Even the benefits of the Cancun upgrade are not enough to attract funds to the Ethereum ecosystem. Currently, what can be compared with this cycle is the pull of meme coins. The Solana ecosystem has indeed attracted a lot of traffic because of memes. But looking at the entire crypto market, crypto projects are springing up in the bull market. How many of them can get a share of Bitcoin’s capital flow?