By Elizabeth Howcroft

LONDON (Reuters) – Global venture capital investment in crypto companies rose to $2.4 billion in the first three months of 2024, data showed on Monday, in a tentative sign that investor interest is returning.

Crypto venture capital flows peaked at $11.1 billion in the first quarter of 2022, before seven consecutive quarters of declining volumes, with just $1.7 billion in the last quarter of 2023, data from PitchBook showed.

“The crypto industry is still in its early stages, and there is a lot of room for growth and innovation,” PitchBook senior analyst Robert Le said in a report.

“Barring any major market downturns, we expect the volume and pace of investments to continue increasing throughout the year,” he added.

A combination of low interest rates and high risk appetite had fuelled the crypto industry to explosive growth in 2020 and 2021, but a series of bankruptcies at major crypto firms in 2022 spooked investors and sent the price of bitcoin plummeting.

Investors who had backed U.S. exchange FTX were forced to write down their investments to zero, while millions of people were left out of pocket as various crypto platforms stopped allowing withdrawals.

Over the last year, some investors have become more confident about crypto, helped by U.S. regulators at the start of 2024 approving exchange-traded funds tracking bitcoin’s spot price.

has steadily recovered from 2022’s lows, hitting a fresh all-time high of $73,803.25 in March – although it has since struggled for direction.