June 3, 2025 – Global Markets — In May, cryptocurrency venture capital (VC) deals plunged to their lowest monthly level of 2025, with only 62 funding rounds closed—marking the fewest since January 2021. Paradoxically, those same rounds raised over $909 million, making it the second‑highest month by funding volume this year, behind only March’s $2.89 billion across 78 rounds .
According to RootData analytics (via Cointelegraph), May recorded just 62 completed crypto VC rounds, the lowest tally since early 2021. Multiple factors contributed:
- Seasonal slowdowns: May and June are historically quieter months in venture markets.
- Macro headwinds: Ongoing high interest rates, bond-market volatility, and global tariff tensions dampened risk appetite.
As Aurelie Barthere of Nansen noted, “market prices and sentiment peaked at the end of January… before ranging from May 23 on deterioration of tariff rhetoric”.
Despite fewer deals, over $909 million was raised in May—making it the second-best month of 2025 by value. This disparity highlights a pivot toward larger, later-stage rounds:
- Average check sizes have surged.
- Investors appear prioritizing high-conviction projects over speculative early-stage deals.
Cointelegraph observed that Bitcoin remained one of the few bright spots, even as most crypto assets yielded disappointing year-to-date performance.
While traditional VC funding slowed, mergers and acquisitions (M&A) in crypto soared—87 notably by Coinbase’s $2.9 billion acquisition of Deribit on May 8, which set a record as the largest crypto M&A to date.
This marks a broader consolidation trend, with larger players acquiring promising projects or infrastructure, signaling confidence in long-term adoption while smaller startups face tougher funding conditions.
Industry analysts pointed to several interlinked influences:
- Global macro issues: Persistent interest rate concerns, bond market instability, and tariff news pulled investment from new ventures.
- Market cycles: Crypto fundraising tends to slow after initial rally phases, especially before summer, when investors often pause activity.
- Shift in investor focus: As one former investment banker noted, “Most of the transactions we are seeing are consolidation plays…typical in cooling markets or after extended periods of range‑bound pricing”.
Despite the slowdown, some significant deals moved forward. Twenty One Capital, known for its Bitcoin treasury strategy and backing from Tether, Bitfinex, and Cantor Fitzgerald, raised $100 million in convertible bonds—bringing its total to $685 million.
Other notable raises included seed and tokenization rounds:
- aZen secured $1.2 million for DePIN development.
- Securitize received funding from Jump Crypto.
- Savea and Dexari rounded out smaller strategic raises, highlighting ongoing investor interest in sectors like tokenized assets and DeFi infrastructure.
The May data points to several key market trends:
- Investor selectivity is rising: With fewer rounds but larger cheque sizes, investors are focusing on proven teams and scalable models.
- Consolidation > exploration: Strong M&A activity suggests a maturing industry where established players are building via acquisition.
- Macro-calibrated strategy: Fundraising is closely tied to economic conditions—summer months and interest rate uncertainty steer risk assets like crypto.
- Room for strong early-stage startups: In a quieter market, standout projects gain more visibility and may negotiate favorable terms.
Analysts project that VC activity may recover in early Q4, once the summer seasonal pause ends and market clarity returns.
Upcoming catalysts include:
- Regulatory clarity (e.g. stablecoin frameworks or token definitions).
- Major adoption events, such as new Bitcoin ETF inflows or institutional commitments.
- Investor return to deal flow as interest rates stabilize or risk appetite rebounds.
May’s data underscores a critical juncture: deal volume is slowing, but capital remains plentiful—with investors shifting toward more mature, strategic transactions. M&A ends its breakout trend, reaffirming consolidation as crypto infrastructure matures.
For founders, this moment demands stronger execution and clearer value propositions. For investors, it offers a chance to double down on innovation leaders while bargains emerge in smaller sectors. Ultimately, crypto’s journey may be entering a new phase of institutional rigor, even as differentiated projects position themselves ahead of an expected late‑year resurgence.