Market Trends and Investor Sentiment
Venture capital investment in the cryptocurrency sector continues to decline through late 2025, with a noticeable reduction in deal activity. Despite several high-profile fundraisings, the number of funding rounds remains subdued compared to previous bullish markets, signaling caution among investors amid ongoing market volatility. The slowdown reflects broader macroeconomic uncertainties affecting both traditional and crypto markets, dampening venture capital enthusiasm.
Key Investment Highlights
- •Venture capital funding in crypto remains muted, with deals concentrated in large, established firms.
- •November saw a significant drop in disclosed funding rounds, with just 57 reported deals—a low point this year.
- •The majority of investments focused on sectors like centralized finance, decentralized finance, and NFTs/GameFi.
- •Despite smaller deal flow, notable funding rounds included Revolut’s $1 billion raise and Kraken’s $800 million capital infusion.
Venture capital activity in the crypto industry has notably diminished throughout 2025. Despite a few headline-grabbing funding rounds, such as Revolut’s $1 billion and Kraken’s $800 million raises, the overall number of deals disclosed in November was among the lowest of the year, with only 57 reported funding rounds, according to RootData. This is indicative of a broader shift towards caution among investors, as market conditions remain challenging.
Analysis from Galaxy Digital shows that, in the third quarter, total funding reached $4.65 billion but was heavily skewed toward larger, mature firms, with deal volumes failing to match previous peaks during bull markets. This trend continued into November, where most of the activity was centered in sectors like centralized finance, decentralized finance, and Non-Fungible Tokens (NFTs) and GameFi projects. The reduction in deal activity raises concerns about the sector’s long-term growth prospects, especially as the industry navigates macroeconomic headwinds and regulatory uncertainties.
Notable Startup Funding Rounds
Despite the slowdown, select startups continue to attract significant backing. Ostium, a decentralized perpetuals platform founded by alumni of Harvard, raised $24 million to expand its protocol for trading traditional assets such as stocks, commodities, and currencies. The company aims to establish itself as a leading player in the burgeoning real-world assets market, investing capital into smart contracts, pricing infrastructure, and liquidity systems to handle increased trading volumes. Backers include General Catalyst, Jump Crypto, Susquehanna International Group, and angel investors from firms such as Bridgewater, Two Sigma, and Brevan Howard.
Similarly, Axis secured $5 million in a funding round led by Galaxy Ventures, focusing on developing an onchain yield protocol for assets like Bitcoin, gold, and USD stablecoins. The funds will accelerate the platform’s development, with prior deployment of $100 million in private capital to stress-test the protocol. Meanwhile, PoobahAI, a Texas-based startup creating no-code platforms for tokenized Web3 networks and AI agents, raised $2 million to expand its offerings, enabling creators and developers to launch decentralized ecosystems without advanced technical skills.