Crypto Startups Attract Over $1B in Funding Since Trump's Election Victory

The crypto industry has experienced a surge in investment, with startups raising over $1 billion from Venture Capital (VC) funds since Donald Trump's election victory.

Crypto startups have secured over $1 billion in funding from Venture Capital (VC) funds in the wake of Donald Trump's election victory, fueled by optimism about a more favorable regulatory landscape under the incoming administration.

According to DefiLlama data, VCs contributed $796 million in November and an additional $511 million in December, bringing the total to approximately $1.3 billion.

This influx of capital marks a significant increase compared to previous months. For instance, in October, VC funds allocated only $236 million to crypto startups.

The Avalanche Foundation was the largest fundraiser during this period, securing $250 million through a private token sale. This funding is geared toward the network's upcoming Avalanche9000 upgrade, which is set to enhance blockchain scalability and reduce costs.

Notably, the upgrade will also introduce a new virtual machine, which is expected to attract more developers and dApps to the Avalanche network.

VCs also showed strong interest in crypto infrastructure projects, channeling over $500 million toward this segment. Among the notable funding rounds, Zero Gravity Labs, a Web3 infrastructure provider, raised $40 million, while Bitcoin (BTC) miner Canaan Creative secured $30 million.

Additionally, the DeFi sector saw a boost with over $150 million in funding. Key investments included $45 million for USDX Money and $30 million for World Liberty Financial.

This fresh round of funding follows a recovery in the DeFi market, which had been battered by the Terra (LUNA) collapse earlier in 2022. However, toward the fourth quarter, DeFi total value locked (TVL) began to rebound.

Now, as 2023 begins, the DeFi sector seems to be attracting interest from both retail and institutional investors.

The funding spike is largely attributed to anticipation of a pro-crypto stance in the upcoming administration. During his campaign, Trump expressed strong support for the crypto industry, promising to bring long-awaited regulatory clarity.

One of his key proposals was to establish a Strategic Bitcoin Reserve (SBR) in the United States, which would see the government acquire a vast amount of Bitcoin.

Moreover, Trump has also announced several pro-crypto appointments, including Paul Atkins as the proposed chair of the Securities and Exchange Commission (SEC) and David Sachs as the White House's first crypto czar.

According to experts, these appointments could drive regulatory clarity, remove barriers to institutional adoption, and foster greater investment in the sector.