US Startups Capture 46% of Crypto VC Funds in Q4, Trump’s Support Could Enhance Growth

Highlights:

• US-based crypto startups received over 46% of venture capital funding in Q4 last year.
• Experts say that an incoming pro-crypto administration could further boost US dominance in the crypto space.
• Donald Trump plans to issue an executive order making cryptocurrency a national priority.

In the Q4 report filed on January 15, Galaxy’s head of research, Alex Thorn, and research analyst Gabe Parker stated that nearly half of all venture capital funding in Q4 of the previous year went to US-based cryptocurrency startups. They emphasized that, despite a “remarkably tricky and often hostile regulatory regime,” US companies maintained their dominance throughout the year.

US Secures 46.2% of Crypto VC Funds Despite Regulatory Challenges

Companies based in the United States secured 46.2% of total venture capital funding. Startups in Hong Kong experienced a significant surge, accounting for 17.4%. Meanwhile, the United Kingdom contributed 6.8%, Canada accounted for 6%, and Singapore captured 5.4% of the total funding.

CRYPTO VC TO REBOUND IN 2025?

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

Fund managers are facing a tough environment due to a challenging macroeconomic climate and regulatory scrutiny. The U.S. Securities and Exchange Commission (SEC) set a record for penalties and fines in fiscal year 2024. The SEC collected $8.2 billion in financial remedies, the highest in its history. Despite this, the number of enforcement cases dropped by 26%. These regulatory changes may either hinder or reignite fund allocators’ interest in the crypto space.

Experts emphasized that the incoming presidential administration and Congress are set to support crypto. This shift will likely increase U.S. dominance. Traditional U.S. financial firms will enter the crypto space if regulators introduce stablecoin frameworks and market structure laws.

Trump to Make Crypto a National Priority

Bloomberg reported on Jan. 17 that U.S. President-elect Donald Trump plans to issue an executive order making cryptocurrency a national policy priority. The order will encourage regulatory collaboration with the crypto sector and create an advisory council for industry input. This potential shift could further impact fund allocators’ interest in the space.

Trump plans to release an executive order elevating crypto as a policy priority and giving industry insiders a voice within his administration https://t.co/egBFjchxsO

— Bloomberg Crypto (@crypto) January 16, 2025

The order may be signed on January 20, Trump’s first day back as president. It’s not final yet. The crypto industry, which supported his campaign, expects this move after he promises to make the U.S. a “crypto capital.” This marks a change from President Biden’s approach, which included over 100 enforcement actions and restricted crypto companies’ access to banking.

Trump’s Executive Orders Could Overturn Biden’s Crypto Policies and Drive U.S. Industry Growth

According to a recent report from The Washington Post, Trump plans to issue executive orders on his first day to reverse key crypto policies from Biden’s presidency. This includes the Staff Accounting Bulletin 121 (SAB 121), which forces banks to list customers’ digital assets as liabilities. Crypto advocates oppose this rule, saying it limits the adoption of digital currencies.

Trump pledged to establish a 24-person “Bitcoin and crypto presidential advisory council” consisting of industry leaders, including CEOs and founders. This group would advise the new administration on crypto policies, work with Congress, and collaborate with regulators like the SEC and Treasury Department.

Under Trump, federal crypto sales could be halted. In a July speech at the Bitcoin Conference, he promised that if re-elected, he would follow the crypto rule: “Never sell your Bitcoin.” Instead, he proposed turning seized Bitcoin into a “strategic national Bitcoin stockpile,” treating it like a reserve asset. As crypto adoption grows and government support increases, this could drive more funding into U.S. crypto initiatives.