Crypto Investment Deals Plunge 40% in May 2025

Cryptocurrency investment deals experienced a significant downturn in May, reaching their lowest point of 2025. According to data from a crypto analytics platform, only 62 rounds were completed, marking the fewest deals since January 2021. Despite this decline, the 62 investment rounds managed to raise over $909 million, making it the second-best month of the year by value, trailing only March’s $2.89 billion across 78 rounds.

The slowdown in venture capital (VC) activity is attributed to a combination of market-specific and macroeconomic factors. Analysts point to the peaking of market prices and sentiment at the end of January, followed by a rebound in April, and subsequent deterioration due to tariff rhetoric. This volatile environment has made it challenging for risk assets to secure new mergers and acquisitions (M&A) deals.

According to a principal research analyst at a crypto intelligence platform, the challenging macro backdrop, coupled with higher-for-longer policy rates and jittery bond markets, has contributed to the slowdown. Most transactions observed are consolidation plays, a pattern typical in cooling markets or after extended periods of range-bound pricing. The disappointing year-to-date performance of most crypto assets has also dampened interest, with Bitcoin being a notable exception.

Despite the drop in venture deals, M&A activity remained robust. Coinbase Global acquired Deribit for $2.9 billion in a traditional M&A deal, marking a new all-time high for crypto M&As. This acquisition highlights the continued strength in M&A activity within the crypto sector, with more large deals expected to go through traditional liquid channels. Increased regulatory clarity is anticipated to benefit direct deals between large companies and protocols, moving away from the VC market.

The slowdown in VC deals may also be influenced by seasonal patterns, with May and June typically seeing lower activity. However, activity is expected to pick up as the year progresses, particularly in early Q4, which historically sees the best deals and a return of investors from summer mode. This seasonal trend suggests that the current slowdown may be temporary, with a resurgence in VC activity anticipated in the coming months.