Venture capital investment in crypto and blockchain-focused startups dropped sharply in the second quarter of 2025, with total funding reaching $1.976 billion across 378 deals, according to data from Galaxy.
This represents a 59% decline in capital raised and a 15% decrease in deal count compared to the first quarter, the report states.
The steep quarterly drop is partly due to the absence of unusually large transactions like Q1's $2 billion investment from UAE-linked MGX into Binance, which had inflated earlier figures.
Without that deal, Q2's decline would have been closer to 29%.
More than half of the capital raised — 52% — went to later-stage companies, marking only the second time since 2021 that mature firms outpaced early-stage startups in capital share.
Mining firms emerged as the leading investment category, capturing over $500 million, driven primarily by a $300 million raise by cloud-mining operator XY Miners.
This surge reflects growing demand for computing power amid the expansion of artificial intelligence applications.
By geography, the United States retained its leading position, accounting for nearly 48% of capital invested and 41% of deals.
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The United Kingdom ranked second in both capital and deal count, followed by Japan and Singapore.
On the fundraising front, investors committed $1.76 billion to 21 newly launched crypto venture funds in Q2.
While capital allocated has risen slightly in 2025, the number of new funds launched remains near five-year lows, highlighting ongoing caution among allocators.
The competitive landscape is also shifting, with spot exchange-traded products (ETPs) and digital asset treasury companies drawing institutional capital that might otherwise have gone into early-stage crypto investments.
Despite subdued activity compared to the 2021–2022 bull run, certain sectors, notably AI-integrated blockchain infrastructure, trading platforms, and pre-seed ventures, continue to attract steady deal flow.
Market observers suggest that improving U.S. policy support for digital assets could bolster domestic dominance and potentially revive venture allocations later in the year.
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