According to a new report published by Trammell Venture Partners (TVP), the number of Bitcoin native startups that received venture capital investments increased despite a decline in total capital allocated to the sector.
The report highlighted that the unique number of funded Bitcoin native companies increased by 27.5% per year, while the number of individual transactions increased by 31.8%.
At the same time, the total amount of capital raised in these transactions fell 22.1% compared to 2023, totaling $234 million a year.
This report focuses on early Bitcoin native software startups, excluding mining operations and atypical or late funding rounds.
TVP defined a “Bitcoin native” company and was founded on the principle that Bitcoin acts as a basic global currency asset and digital cash, and that the business model is aligned with the Bitcoin protocol stack.
This new category includes startups building services that leverage infrastructure, applications, and base Bitcoin networks or related layers.
Pre-seed and early stage investment growth
The increase in transaction numbers was driven by increased activity in the early staged funding rounds. Pre-seed transactions increased by 50%, while seed stage transactions increased by 30%.
Series A transactions increased 60% year-on-year. This suggests a growing interest among investors supporting Bitcoin native companies from the early stages of development despite broader market attention at Crypto Venture Capital.
The difference between an increase in startups and an increase in capital allocation indicates a change in market trends. Ventures are spreading investments to a wider range of early stage companies, and may support lean rounds and valuation discipline in large, concentrated bets.
The median round size remained stable during the funding stage, but tallied capital fell from $303 million in 2023 to $234 million in 2024, according to the report.
Pre-seeded Bitcoin native transactions have increased more than seven times over the four years from 2021 to 2024.
The consistent rise in early stage trading activity positions Bitcoin and native startups as clear and increasingly active segments within the broader crypto investment environment.
It’s growing even though it’s small
Bitcoin native startups continue to be a small portion of the total venture capital fund in the market, but show relatively high momentum.
According to TVP, these startups account for 5.98% of all Crypto Venture Capital invested in 2024, and 2.34% of all venture-backed crypto transactions.
This is compared to the majority of Bitcoin, which currently has Crypto’s total market capitalization of over 62%. The disparity highlights the continued gap between Bitcoin’s market advantage and its representative in the startup investment flow.
TVP claimed that the Bitcoin native sector is entering the breakout phase and has grown for the fourth consecutive year across key investment metrics.
The report also highlights that Bitcoin entrepreneurs are increasingly attracting attention from prominent investors, including the Founder Fund, Libbit Capital, Accomplices, Vallar Equity Partners, Boost VC, Plug and Play, Village Global, GSR Ventures and Y Combinators. All of these investment funds participated in the Bitcoin native trading syndicate in 2024.
While the overall venture capital allocation to Crypto has been contracted over the past two years, the Bitcoin Native Segment demonstrates resilience through consistent growth in startup formation and early stage capital access.
The number of Bitcoin native startups that received funds, even if they increased in 2024, increased, reflecting a growing interest in the category and a shift towards early participation.
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