After a long period of slowdown, investment in crypto startups rebounded significantly in the third quarter, reaching $4.65 billion. This is one of the strongest recoveries observed since the fall caused by the collapse of FTX at the end of 2022. Investor confidence, severely shaken at the time, seems to be recovering, with a return of financing to levels not seen in several years.
In brief
- Investment in crypto startups rebounded strongly in Q3, reaching $4.65 billion, one of the best levels since the collapse of FTX.
- Funding increased by 290% on 415 transactions, combining early rounds and major fundraising.
- However, venture capital is not keeping up with the rise in crypto prices.
Q3 2025 sees strong crypto venture capital activity
Investment in crypto ventures jumped 290% from the previous quarter, spread across 415 transactions. This increase reflects both a marked increase in the amounts invested and a slight increase in the number of operations. Alex Thorn, head of research at Galaxy Digital, highlighted this in a recent report. For comparison, the first quarter of 2025 recorded $4.8 billion, making Q3 one of the most active periods for the sector.
This dynamic affected several segments: stablecoins, artificial intelligence, blockchain infrastructures and trading platforms. Early-stage projects also continued to be supported in the first rounds of financing. Overall, these trends show solid venture capital engagement in crypto, although still short of the frenzy seen during the 2021-2022 bull cycle.
In this rebound, a few major transactions concentrated a significant portion of capital: seven transactions represented approximately half of the funds raised. Among them, 1 billion dollars for Revolut, 500 million for Kraken, 250 million for Erebor, 146 million for Treasury and 135 million for Fnality. Companies founded in 2018 received the largest share of funding, while those founded in 2024 were the most likely to raise funds.
United States dominance and regional distribution
The United States continued to dominate the sector, both in terms of capital and transaction volume. Here is how global distribution is distributed:
- 47% of total financing and 40% of transactions concluded by American companies.
- The United Kingdom comes second with 28% of the amounts raised and 6.8% of transactions.
- Singapore and the Netherlands respectively capture 3.8% and 3.3% of the capital, while Singapore concentrates 7.3% of operations, and Hong Kong 3.6%.
Regarding the future, Thorn believes: “ We expect US dominance to increase, especially since the GENIUS Act takes effect and if Congress adopts a market framework for crypto. This would encourage more traditional financial institutions to get on board. »
Challenges continue to loom over crypto VC funding
Furthermore, venture capital activity has not kept pace with the rise in crypto prices. Bitcoin, for example, reached a record high of $126,000 in October, but funding growth remained behind. Thorn recalls that during the previous bull cycles of 2017 and 2021, the evolution of venture capital went hand in hand with the rise in token prices, a link which has significantly weakened over the last two years.
According to him, “ the stagnation of venture capital can be explained by several factors, including the decline of interest in certain once popular sectors, such as games, NFTs and Web3; increased competition from startups specializing in AI to attract the same capital; as well as rising interest rates, which generally discourage investment in venture capital. »
Regarding trends likely to influence funding, the report highlights that spot exchange-traded products (ETPs), as well as treasury companies specializing in digital assets, could divert some of the capital intended for early-stage crypto startups. Large American investors are increasingly favoring exposure via spot Bitcoin or Ethereum ETPs, rather than directly financing ventures. If this dynamic continues, Thorn believes that more investments could shift to these products, potentially limiting funding for sectors such as decentralized finance and Web3.
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