While 2023 marked a sharp decrease in investments in crypto/Web3 startups by Venture Capitalists, the Bitcoin-only investment fund Ego Death Capital, led by Jeff Booth, aims to raise $100 million in 2024.
Through a statement on its website, the investment company Ego Death Capital announces a fundraising plan of $100 million for investment in Bitcoin-only companies and startups.
Founded in 2021 by Andi Pitt, Nico Lechuga, and Jeff Booth, along with Preston Pysh, Lyn Alden, and Pablo Fernandez as advisors, the fund aims to invest in companies with the goal of accelerating the development of the Bitcoin ecosystem.
Initially, the fund aimed to capitalize on the knowledge asymmetry of investors at the time who had not yet understood the difference between Bitcoin and all other cryptocurrencies. In the first round (Fund I), the fund raised a total amount of $33 million.
In 2024, according to the investment company, the majority of venture capitalists still have not grasped the revolutionary nature of the Bitcoin protocol or how it is developing in layers. For this reason, the fund has decided to initiate a new capital raising effort with the goal of reaching $100 million.
In Fund II, Lyn Alden and Preston Pysh join as partners, Bitcoin and Lightning Network developer Lisa Neigut joins as a technical advisor, and Pete Briger, President of Fortress Investment Group, a well-known investment fund, joins as advisor.
“While it is still early and there will be many ups and downs along the way, a transition from the world operating on top of a dishonest ledger, to the world working on top of an honest ledger is firmly underway. That transition will create incredible business opportunities, while bringing hope and abundance to billions of people around the world.”
Collapse in investments in Crypto/Web3 startups
The positive news coming from Bitcoin-only VCs contrasts with the reduced capital allocation by crypto VCs in companies and startups within the industry.
A report conducted by Galaxy illustrates that, despite 2023 being a positive year for Bitcoin with an annual performance of approximately 160%, investments in crypto and Web3 startups have experienced a significant decline compared to the two previous years.
The data shows that the past year concluded with only one-third of the investments compared to 2022 and 2021.
The main reasons behind this reduction in investments can be attributed to restrictive monetary policies by central banks and various failures within the industry.
Another cause of this downturn could be linked to the SEC’s approval of spot Bitcoin ETFs. After a long-awaited period of about 10 years, the SEC decided to approve only products with bitcoin as the underlying asset, stating that this event should not in any way indicate the Commission’s willingness to approve products with other cryptocurrencies as the underlying asset. This suggests that the vast majority of digital assets fall under the category of financial securities and are therefore subject to federal securities laws.
