Crypto Venture Funding Surges 40% in Q1 2025 to $4.9 Billion
2min read Crypto venture funding reached $4.9 billion in the first quarter of 2025, marking a significant rebound for the industry. This figure represents a 40% increase in capital raised compared to the previous quarter, with 446 deals completed, reflecting a 7% growth in deal volume. This surge makes the first quarter of 2025 the most active period for crypto fundraising since late 2022.
MGX’s $2 billion investment in Binance was a major contributor to this figure, accounting for over 40% of the capital raised. Excluding this single deal, first-quarter funding would have stood at $2.8 billion, reflecting a 20% decline compared to the fourth quarter of 2024. This highlights the significant impact of large investments on overall funding figures.
The Binance investment propelled the Trading, Exchange, Lending, and Investing sector to the top of the funding chart, attracting $2.55 billion with a 47.9% growth rate. If the Binance deal is excluded, the DeFi sector would have led the quarter with $763 million in capital inflows. This indicates a strong interest in trading-related firms and the DeFi sector.
Web3-related projects saw the highest number of deals, with 73 rounds representing 16% of all transactions. These projects included gaming, nfts, daos, and metaverse initiatives. Trading-related firms followed with 62 deals, showcasing the diversity and breadth of investments in the crypto space.
There was a notable shift in investor focus, with 65% of the capital going to later-stage companies for the first time since the first quarter of 2021. Early-stage rounds, mainly pre-seed deals, saw a slight dip but remained strong compared to previous cycles. This shift suggests a growing maturity in the crypto investment landscape, with investors favoring more established projects.
US startups dominated the funding scene, accounting for 38.6% of the total deal count. The UK came next with 8.6%, while Singapore and the UAE followed with 6.4% and 4.4% respectively. The uptick in US investment may reflect growing government support for digital assets, as well as the region's established tech ecosystem.
The report noted a recovery in the correlation between Bitcoin’s price movements and venture investment. This trend, which had weakened since early 2023, shows signs of strength over a multi-year horizon. This correlation suggests that investor sentiment and market conditions are closely tied to the performance of Bitcoin.
Despite the year-over-year growth, fundraising remains challenging. Factors such as cautious allocator sentiment and the lingering impact of the 2022–2023 downturn continue to weigh on the market. Additionally, the rise of AI has shifted investor focus away from crypto, with the AI sector now commanding the level of attention that crypto held in 2021 and early 2022. This is evident with the decline in funds raised by crypto-focused venture funds, which fell to $1.9 billion during the first quarter.
Despite these challenges, the outlook remains optimistic. 2025 is already on pace to outdo the previous year’s fundraising figures, indicating a resilient and growing interest in the crypto industry. This optimism is bolstered by the strong performance in the first quarter and the continued investment in various sectors within the crypto space.
