Bitcoin Accumulation and Treasury Strategies May Be Driving Decline in Crypto VC Funding, Galaxy Research

• VC funding dropped to $1.97B across 378 deals in Q2 2025

• Institutional flows favored digital asset treasuries, which raised roughly $15B YTD through Aug. 21

• Investor focus moved to Bitcoin accumulation, stablecoin infrastructure, and real-world asset tokenization

Meta description: Crypto venture capital slowdown hits funding: Q2 VC funding declined to $1.97B as investors pivot to treasuries and Bitcoin accumulation — read the VC roundup.

What is causing the crypto venture capital slowdown?

Crypto venture capital slowdown is driven by investor preference for direct digital asset accumulation and treasury strategies, reduced appetite for early-stage risk, and demand for clearer revenue paths. Galaxy Research and Insights4VC data show Q2 VC funding fell significantly while treasuries attracted major capital flows.

Galaxy Research reported startups raised $1.97 billion across 378 deals in Q2 2025, a 59% decline in funding and a 15% drop in deal count versus Q1. That level is the second-lowest quarterly total since Q4 2020.

Crypto-focused venture capital has yet to fully reclaim its 2021 highs. Source: Galaxy Research

How are capital flows shifting within crypto markets?

Capital is re-routing from venture rounds to digital asset treasuries and tokenized asset strategies. Insights4VC data indicate treasury vehicles raised about $15 billion through Aug. 21 to acquire Bitcoin, Ether and other tokens. This shift reflects a strategy to hold liquid crypto assets on balance sheets.

Investors cite clearer revenue models and balance-sheet utility as reasons to favor treasuries over speculative startup backing. Hunter Horsley, CEO of Bitwise, has publicly noted the growing emphasis on sustainable business models and explicit token accumulation strategies.

Mavryk raises $10 million to advance institutional RWA tokenization — what does this mean?

Mavryk Network’s $10 million raise, led by Multibank Group, funds plans to tokenise over $10 billion of UAE property assets. The round supports institutional access to real-world asset (RWA) tokenization, a sector attracting strategic capital despite the broader VC slowdown.

This raise follows an earlier $5 million round and highlights continued investor interest in tokenizing physical assets that deliver yield and on-chain liquidity.

How significant was Grvt’s $19 million Series A?

Grvt’s $19 million Series A, co-led by ZKsync, Further Ventures and EigenCloud, funds privacy-preserving onchain finance infrastructure built on ZKsync technology. The company reports growing trading activity; DefiLlama shows rising perpetual futures volumes tied to onchain products.

Why is stablecoin infrastructure attracting funding now?

Stablecore’s $20 million seed round underscores demand from banks and credit unions for compliant stablecoin rails. The company said regulatory developments such as the US GENIUS Act could accelerate adoption among traditional financial institutions. The total stablecoin market capitalization recently topped $300 billion, highlighting sector momentum.

Source: Hunter Horsley

Which early-stage projects still attracted funding?

Plural raised $7.13 million to build an “electron economy” connecting real-world energy assets with digital markets. The platform tokenizes distributed solar and battery assets, offering yield exposure to onchain investors. Plural reports over $300 million in assets available on its marketplace.

The supply of stablecoins in circulation has surged over the past year. Source: DefiLlama

Funding roundup — who raised what?

Below is a quick comparison of notable rounds mentioned in this VC Roundup.

Frequently Asked Questions

How large was the Q2 2025 crypto VC funding drop?

Q2 2025 saw crypto VC funding total $1.97 billion across 378 deals, a 59% decline in dollars and a 15% drop in deal count from Q1, per Galaxy Research.

Are investors still backing crypto startups?

Yes, but selectively. Investors prefer projects with clear revenue or token utility—RWA, stablecoin infrastructure, privacy, and onchain finance remain priorities.

What alternatives are investors choosing?

Many are allocating to digital asset treasuries, focusing on Bitcoin and large liquid tokens, and to tokenized real-world assets that offer yield and lower execution risk.

Key Takeaways

• Funding contraction: Crypto VC funding fell to $1.97B in Q2 2025 — down sharply from Q1.
• Shift to treasuries: Treasury vehicles raised ~ $15B YTD through Aug. 21 to accumulate crypto.
• Selective capital: Investors favor RWA tokenization, stablecoin rails, and privacy focused infrastructure.

Conclusion

The crypto venture capital slowdown reflects a strategic pivot: investors are prioritizing direct digital asset accumulation, treasury plays and projects with proven revenue models. Expect continued selective VC activity in tokenization, stablecoins and privacy infrastructure as institutional adoption rises. For ongoing coverage, follow COINOTAG reporting and periodic VC roundups.