Cointelegraph Research’s latest report provides an outlook on the state of fundraising in the crypto market and the key VC trends of 2025. VC investments in Web3 startups doubled in 2025 from the year before, driven by institutional interest, particularly in the RWA sector, which raised more than $2.5 billion. There has also been a distinct increase in mergers and acquisitions (M&A) and other large-scale corporate financing arrangements.
Download the free report to discover important industry highlights
The state of crypto venture capital (VC) in 2026
In 2025, venture capital investment in crypto startups exceeded $8 billion in every quarter for the first time since 2022. Total funding in 2025 reached more than $34 billion, double the $17 billion recorded in 2024. Nevertheless, 2025 can still be considered a risk-off year, as investors favored bonds and safe-haven assets, such as precious metals, which posted exceptional performance that year, amid geopolitical uncertainty and elevated interest rates.
The reduced risk appetite of venture capital also changed perceptions of business models in crypto. In 2025, fund managers prioritized sustainable revenue models, organic user metrics and strong product market fit instead of projects with early traction and limited revenue visibility. This shift was corroborated by the move from pre-seed and seed rounds toward later financing stages. Seed-stage financing declined by 18%, while Series B funding increased by 90%. This indicates deeper investor involvement in projects and a stronger focus on ecosystem development rather than early-stage experimentation.
Download the full report to explore which startups and niches attracted most attention from VCs
The trending narrative: Real-world assets (RWA)
RWA tokenization has shifted from a narrative into a budding sector over the past three years. According to RWA.xyz data, tokenized real-world assets have surpassed a capitalization of $38 billion, up 744% from $4.5 billion in 2022. RWAs have emerged as one of the fastest-growing segments in the crypto market, second only to stablecoins. Despite this growth, the crypto RWA sector remains small relative to $156 trillion in fixed-income and $146 trillion global equities markets. This suggests substantial room for further expansion.
From the investment side, the first signs of this shift are present in the progression of annual funding figures. In 2025, VC funding for RWA tokenization projects exceeded $2.5 billion.
Download the full Cointelegraph Research report to explore deeper insights into the RWA sector
Fading narrative for Ethereum layer 2s and modular infrastructure projects
While overall VC interest in the crypto market increased throughout the year, certain narratives showed clear signs of decline. In 2022, Ethereum layer 2 projects raised more than $1.2 billion, followed by $387 million in 2023 and $587 million in 2024. In 2025, funding reached a low of $162 million, representing a 72%decline from 2024.
This was likely caused by the rapid proliferation of layer-2 blockchains, which has led to an increasingly saturated landscape and a decline in VC appetite for this technology. As the number of L2 chains quickly increased above 50, the demand for blockspace was saturated.
See which crypto sectors are losing VC interest in the latest report by Cointelegraph Research
We would like to thank Canton Foundation, CryptoRank, DWF Labs, Everest Ventures Group, Mercuryo, and RWA.xyz for contributing data, insights, and opinions to this report.
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