Crypto Startup Funding Drops 22% in Q2 2025 Despite June Surge

Venture capital funding for crypto startups experienced a notable decline in the second quarter of 2025, totaling $4.5 billion, which represents a 22% decrease compared to the previous quarter. This downturn was despite a strong finish in June, which saw $2.5 billion in funding, more than four times the amount raised in May. The monthly breakdown for the second quarter shows $1.29 billion in April, $624 million in May, and $2.5 billion in June. June's funding was the second-largest monthly total of the year, trailing only March's $3.5 billion, which was largely driven by Binance's $2 billion investment in MGX.

Despite the late-quarter rebound, the total funding for the second quarter fell short of the nearly $6 billion invested in the first quarter. However, it is still double the amount of venture capital that flowed into crypto in the second quarter of the previous year. The largest funding round of the quarter went to Twenty One Capital, which received $585 million. Other significant transactions included Eigen Labs, which secured $70 million from Andreessen Horowitz’s a16z, and Hypernative, which raised $40 million. Symbiotic also attracted $29 million in funding.

While the number of deals dropped to a multi-year low in May, with only 62 rounds, the median round size for the quarter remained above $10 million. This indicates that investors continued to focus on later-stage and infrastructure projects. DeFi infrastructure, restaking, and AI-linked middleware were the sectors that attracted the largest investments, reflecting a shift in the public market's narrative. North American companies were the primary recipients of these funds, particularly in larger Series B and later rounds. Early-stage activity in Asia and the Middle East also saw an increase, particularly in token-focused seed deals.

Despite the slower pace of funding in the second quarter, the year-to-date total of approximately $10.3 billion already surpasses the full-year figure of $9.6 billion for 2024. This suggests that, despite the quarterly decline, the overall trend for crypto venture capital remains robust. The strong finish in June, coupled with the continued focus on later-stage projects, indicates that investors remain optimistic about the long-term potential of the crypto sector. However, the decline in the number of deals and the overall funding in the second quarter highlights the need for sustained investment and innovation to maintain this momentum.