Crypto VC deals drop in Q1, but funding more than doubles: PitchBook

Crypto venture capital deals in the first quarter of 2025 saw deal values jump even as the number of deals sank from the same quarter a year ago, says PitchBook.The venture research firm said in its May 14 Crypto VC Trends report for Q1 that 405 deals were made in the quarter, down 39.5% from the 670 deals made in Q1 2024, but slightly up from the 372 made in Q4 last year.However, the total value of deals in Q1 more than doubled from a year ago, jumping to $6 billion compared to $2.6 billion in the first quarter of 2024 and doubling from $3 billion in Q4 2024.PitchBook's senior crypto research analyst Robert Le said that despite macroeconomic turmoil over the quarter, “capital continued to seek crypto’s core utility rails.”VCs poured nearly $2.55 billion across 16 deals into businesses like crypto asset managers, exchanges, and financial services at a rate that far surpassed any other segment.Crypto infrastructure and development firms saw the next largest venture funding, fetching nearly $955 million across 30 deals.Web3-focused companies saw the third-most deals and funding, at 23 and $231.2 million, respectively. Source: PitchBook.Looking ahead, PitchBook’s Le said Circle’s pending initial public offering (IPO) “represents the most important price-discovery event for crypto equity since Coinbase listed in 2021.”If Circle is valued above the rumored $4 billion to $5 billion range, it could show venture investors that business models similar to Circle’s are profitable and sustainable while also providing a clearer benchmark for future exits.“A strong roadshow could therefore crowd in new late-stage capital and reset valuation expectations upward across the payments and infrastructure stack.”Circle has raised $1.18 billion in VC funding to date, according to PitchBook, which estimates a 64% chance that it will go public in the future.“Dollar-denominated settlement remains crypto’s killer application”Le noted that the market value of stablecoins grew 12% over the first quarter, from $202.3 billion to $227.1 billion, even as other cryptocurrencies saw their values fall or stagnate.“In our view, this divergence underscores a growing consensus: Dollar-denominated settlement remains crypto’s killer application, insulated—at least partially— from broader risk-off moves.”Le said PitchBook expected that near-term venture investments could increase, “especially in payment, remittance, and treasury-management startups that directly monetize stablecoin velocity.”Related: Bitcoin builders defend venture capital's role in layer-2 growthLe added that the $1.4 billion Bybit exploit in February — the largest in crypto history — may accelerate institutional demand for real-time proof-of-reserve tooling, improved custody solutions and middleware that simplifies key management.“Startups addressing those vectors should find a more receptive funding environment despite the broader valuation reset,” he added.Notable crypto venture-backed or growth-stage companies that received investment in Q4 2024. Source: PitchBookMagazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight