Institutional Capital Steers Crypto Funding Amid Decline in Token Hype

Crypto funding totaled $1.9 billion in August, reflecting a 30% decline from the $2.67 billion recorded in July, according to data from DeFiLlama. This drop is attributed to the absence of high-profile public token sales like Pump.fun’s, which accounted for a significant portion of the previous month’s figures. Despite the monthly decline, funding through venture capital remained steady, with $600 million captured from PUMP’s public sale.

DeFi protocols continued to dominate the funding landscape in August, with several major rounds completed. Portal secured $50 million, M0 raised $40 million in a Series B round, and aPriori obtained $20 million in strategic investment. Institutional capital flowed consistently into infrastructure and trading platforms, highlighting the sector’s stability and appeal. The third quarter, so far, has outperformed the second, with $4.57 billion raised in just two months compared to the $4.54 billion in Q2. This indicates sustained institutional interest despite short-term fluctuations.

The AI sector also saw notable funding, with Everlyn raising $15 million and multiple AI-focused projects completing seed rounds. The integration of crypto and AI is gaining traction, particularly in the development of decentralized computing and data solutions. Cybersecurity emerged as another key area, with IVIX securing $60 million in a Series B round, the largest traditional venture round of the month. Stablecoin infrastructure also attracted investment, with Rain securing $58 million in Series B funding.

Payment infrastructure received diverse funding, with OrangeX completing a $20 million Series B round and several smaller rounds aimed at enhancing cross-border and merchant payment solutions. This category benefits from the rising adoption of cryptocurrencies in commercial applications. Gaming protocols also saw some activity, with Overtake raising $7 million and continued development funding across multiple projects. The sector benefits from increased adoption of blockchain-based gaming mechanics and token economies.

Public token sales, however, saw a decline. Without a high-profile token sale, public token sales represented only $30.7 million across seven projects in August, a significant decrease compared to previous months. Public token sales allow for direct community participation and reduce reliance on institutional venture capital. Layer-2 solutions, such as Bitlayer, secured strategic investments, raising $5 million through public token sales, while Hemi Labs completed a $15 million growth round.

The third quarter’s performance underscores the continued institutional interest in crypto funding, despite monthly fluctuations. The combination of DeFi dominance, AI integration, and institutional backing positions the crypto ecosystem for sustained growth, though the absence of major token sales remains a factor in short-term volatility.