Crypto VC Funding Plunges 59% to $1.97B in Q2 2025 as Investors Pivot Strategically

Venture capital investment in crypto ventures collapsed by 59% in Q2 2025, dropping to $1.97 billion across 378 deals, as investor focus shifts from early-stage speculative bets to infrastructure and maturity.

The crypto industry’s venture capital lifeline has markedly weakened in the second quarter of 2025, with global VC funding contracting by a staggering 59% to $1.97 billion, according to Galaxy Digital Research. Deal volume also slipped by 15%, totaling 378 transactions.

Importantly, Q1’s fundraising spike had been significantly bolstered by a one-off $2 billion investment from the UAE’s MGX fund into Binance, skewing comparisons. Excluding that outlier, the decline in Q2 funding was still substantial but milder, at approximately 29%.

Notably, later-stage companies captured 52% of the capital, marking a rare moment where mature ventures garnered more funds than early-stage startups—only the second such occurrence since early 2021.

Sector-wide strategy is also evolving: $300 million flowed into cloud-mining firm XY Miners, leading the mining category, followed by major investment rounds in privacy/security and blockchain infrastructure firms.

Geographically, the United States reclaimed its dominance, accounting for nearly 48% of funding and 41% of deal activity. The U.K., Japan, and Singapore followed. On the fundraising front, investors allocated $1.76 billion to 21 new crypto venture funds, though the overall pace of fundraising remains sluggish.

This broader downturn references macroeconomic headwinds, heightened competition from spot-based ETPs, digital asset treasury vehicles, and AI startups jockeying for investor attention.

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