Business Sandesh Indian Newspaper | Articles | Opinion Pieces | Research Studies | Findings & News | Sandesh News
After a prolonged downturn marked by regulatory uncertainty and market volatility, crypto venture capital funding is showing signs of a strong rebound. In the first quarter of 2025, venture investments in the crypto sector surged to $4.9 billion, the highest quarterly total since late 2022, according to recent industry data.
Confidence Returns to the Market
The sharp uptick in funding signals renewed investor confidence across the digital asset space. After nearly two years of cautious capital deployment, VCs are once again writing big checks, particularly to startups focused on infrastructure, Web3 gaming, decentralized finance (DeFi), and AI-integrated blockchain platforms.
Analysts say the broader macroeconomic environment, including stabilizing interest rates and signs of regulatory clarity in key markets like the U.S. and Europe, has encouraged firms to re-enter the space.
Early-Stage Startups Lead the Charge
Interestingly, the majority of capital flowed into early-stage rounds, suggesting that investors are looking for fresh ideas and disruptive potential rather than simply backing already-established players. Seed and Series A rounds accounted for more than 60% of the quarter’s total funding, with notable raises including a $150M round for a decentralized AI protocol and a $120M round for a next-gen L2 infrastructure startup.
Sector-Wide Momentum
While the funding surge doesn’t mean a full return to the euphoric heights of 2021, it does indicate that crypto’s innovation cycle is far from over. Web3 gaming saw a particularly sharp rise in interest, followed closely by renewed focus on tokenized real-world assets and decentralized identity platforms.
Meanwhile, traditional VCs such as Andreessen Horowitz and Paradigm were joined by a growing number of fintech-native funds and new entrants from Asia and the Middle East.
Despite the optimism, some experts urge caution, noting that the market is still recovering and valuations remain volatile. However, the numbers from Q1 suggest that capital is no longer sitting on the sidelines — it’s actively seeking the next wave of crypto-native innovation.
As crypto startups gear up for what could be a transformative year, one thing is clear: venture capital is back in the game.
