Paradigm, a leading venture capital firm specializing in cryptocurrencies, has initiated a $850 million fund to provide financial backing for emerging crypto businesses in their early stages.

The fund seeks to emphasize the profound impact of the cryptocurrency industry and the increasing inclination towards investing in emerging enterprises. Matt Huang, one of the co-founders of Paradigm, highlights the significance of advancing a favorable future for crypto and underscores the firm’s dual position as investors and creators.

The fund is being established in response to a larger pattern in which other prominent venture capital companies are making substantial investments in the cryptocurrency industry. Galaxy Digital has unveiled a $100 million fund aimed at providing financial backing to 30 nascent cryptocurrency firms during the next three years.

According to a recent analysis by Galaxy Digital Research, almost 80% of the cash invested in the first quarter of 2024 was allocated to early-stage enterprises. Nevertheless, larger venture capital firms with a broad focus have either withdrawn from the area or decreased their investments, hence increasing the difficulty for later-stage businesses to obtain finance.

The survey also saw a marginal rise in pre-seed transactions during the first quarter of 2024, indicating a robust influx of new enterprises into the cryptocurrency sector, facilitated by the active participation of early-stage venture capital firms.