Crypto Treasury Deals Shift Capital Away From Traditional Startup Raises

Generated by AI AgentCoin World
Sunday, Aug 10, 2025 7:33 pm ET1min read
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Aime RobotAime Summary

- Crypto treasury deals (DATs) are diverting capital from traditional startup fundraising, with 2025 VC rounds dropping 56% to 856 compared to 2024.

- DATs gain traction via liquidity advantages and mNAV premiums, creating capital flywheels but raising investor caution over fundamentals.

- VCs now prioritize revenue-generating models (e.g., Hyperliquid) over speculative tokens, signaling market correction toward value capture.

- Early-stage funding faces "Series A crunch" due to reduced LP backing and conservative exchange listings, though quality dealflow in DePINs and ZK infrastructure is emerging.

- VCs expect DAT consolidation, with only major players surviving, while long-term implications for venture diversity and innovation remain uncertain.

Recent trends in cryptocurrency treasury deals (DATs) have drawn significant capital away from traditional startup fundraising, sparking concerns among venture capitalists (VCs) and entrepreneurs. In 2025, the number of traditional crypto startup VC rounds — excluding DATs and token sales — has dropped to 856, compared to 1,933 in the same period in 2024, a 56% decline according to The Block Pro data [1]. Total funding for these rounds has also fallen from $8.13 billion in January–August 2024 to $8.05 billion this year, though much of that is attributed to Binance’s $2 billion raise in March. When excluding that, traditional rounds have dipped to $6.05 billion — a 26% drop year-over-year [1].

VCs argue that DATs are gaining traction due to their liquidity advantages and instant mark-to-market pricing. When a DAT trades at a premium to its market net asset value (mNAV), it gives the fund room to raise more capital, buy more crypto, and increase NAV per share. This creates a flywheel effect, especially for liquid funds and VCs using the structures to manage idle capital [1]. However, investors are now more cautious about fundamentals, particularly in mNAV multiples for both Bitcoin- and altcoin-focused DATs [1].

At the same time, the broader venture market is witnessing a shift toward projects with clear revenue models and value capture. VCs like Michael Bucella of Neoclassic Capital and Ed Roman of Hack VC note that protocols like Hyperliquid — which returns substantial revenue to token holders — are now setting the benchmark [1]. This move away from speculative narratives and toward revenue-generating models is seen as a healthy correction in the market. Cosmo Jiang of Pantera Capital described the decline in “fundamentally valueless tokens” as a necessary reset in the industry [1].

Beyond DATs, broader market challenges are limiting early-stage funding. The post-2021 funding slump has left fewer potential backers for early-stage deals, and Jed Breed of Breed VC highlights reduced LP interest in smaller VCs, leading to a shortage of dry powder for early-stage rounds [1]. A “Series A crunch” is emerging, driven by limited leadership options and conservative token listing practices on exchanges [1].

Despite these challenges, the quality of dealflow has improved, with more teams presenting viable products and revenue models. DePINs and zero-knowledge infrastructure are being cited as underfunded but promising areas, while DeFi protocols with proven revenue models are also gaining attention [1]. VCs expect a shakeout in the DAT space, with most smaller funds consolidating and only a few major players remaining [1].

Overall, while crypto treasury deals are not necessarily reducing total startup funding, they are redirecting capital in a way that raises questions about long-term implications for innovation and venture diversity.

Source: [1]https://www.theblock.co/post/366260/are-crypto-treasury-deals-hurting-general-startup-raises-vc