Crypto venture funding is staging a recovery despite a drop in deal count

The crypto funding landscape entered a new paradoxical phase, with the number of venture capital firms leading capital-raising rounds dropping sharply from pre-2022 peaks, even as the dollars raised have steadily recovered from the depths of 2022, when major events shocked the markets and sent institutional-grade backers and participants running for the hills. 

According to funding data referenced by Tom Dunleavy, head of venture at Varys Capital, the balance of power has tilted heavily toward crypto venture capital firms, with investors now having their pick of the field, the polar opposite of the 2021-2022 period when firms had to actively court projects to accept their funds instead of the other offers on the table. 

However, despite the reduced level of activity, the deals being closed are now bigger, with the firms that have proven the viability of their business models still getting the big bucks, as Cryptopolitan previously reported.

The venture capital landscape has moved on from 2022 FOMO

John Nahas, who is listed as Chief Business Officer at Ava Labs, backed up Dunleavy, noting that only 377 unique investors were involved in deals over the last quarter (about 90 days), compared to nearly 5,500 participants for the whole of 2022. 

While the comparison puts one quarter against four, the numbers show that the roster has shrunk several sizes. The slowest month of 2022, December, still featured 361 unique investors, compared to the 414 in the 2026 data to date. 

For Dunleavy, the biggest thing is how “VCs basically have the pick of the deal they want,” compared to pre-2022, when they had to be constantly “networking/writing/podcasting/going on spaces/” to convince projects to say yes to their checks. 

Now, “most firms are either out of money or are having difficulties raising funds. Those who have money are no longer funding dreams; instead, they reserve their backing for funding Series A and other advanced rounds where projects have proven the viability of their products.

In that regard, pre-seed funding rounds have seen a steady decline over the last three years, accounting for 8.55% of deals to just 6.61% in the past year. 

Also, now that firms no longer have money burning holes in their pockets, the scrutiny has increased. According to Dunleavy, “Deals that used to close in 2-3 weeks now close in 2-3 months,” as VCs now have “more time to do DD.”

Why did the music stop?

The high-profile crashes of FTX and Terra Luna in 2022 prompted predictable overcorrections as market participants reassessed their risk profiles, prompting institutions and retail to pull out, as JP Richardson, CEO of Exodus (NYSE: EXOD), pointed out on X over the weekend. 

Big backers reserve funding dollars for high-performers

With 2022 as an inflection point, crypto funding stats endured lean years in 2023 and 2024 before staging a resurgence in 2025. In March 2025, firms raised $5.6 billion across 142 funding rounds, according to CryptoRank data. Funding rounds for the 2025 year peaked at 145 in February, while 2026’s 100-round peak came in March. 

According to Cryptopolitan, total funding in 2025 ranged between $40-50 billion, up from $9.33-13.5 billion in 2024. 

Research by Galaxy Digital confirms that funds are now being directed to proven projects, noting: “big dollars going to bigger, later-stage companies.” 

The 57% of capital that went to later-stage companies in 2025 was the largest on record, and that trend has persisted into 2026. 

As Cryptopolitan reported, VC funding staged a comeback in March, with Coinbase Ventures and Animoca Brands leading after consecutive slower months to start the year. Predictably, a healthy chunk of the activity went to late-stage projects in undisclosed rounds.  

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