In May 2025, the number of venture capital transactions in the cryptocurrency field dropped to the lowest level of that year, although the financing amount in this field was as high as 909 million US dollars that month.
According to Data from the crypto analytics platform Root Data, only 62 rounds of investment were completed in May, which is the lowest monthly level since January 2021. However, the financing amount of these 62 rounds of investment still exceeded 909 million US dollars, making it the second-best month in terms of financing amount that year, second only to 2.89 billion US dollars in March (78 rounds of investment).
Analysts point out that the combination of specific factors of cryptocurrencies and macroeconomic factors, as well as the “seasonal pattern” of insufficient liquidity in summer, are the main reasons for the decline in investor interest. The price and sentiment of the cryptocurrency market peaked at the end of January, rebounded only in April, and fluctuated again after May 23 due to the deterioration of tariff rhetoric. This market performance may have influenced investors’ decisions. Furthermore, the macroeconomic background is full of challenges. High policy interest rates, volatile bond markets and new tariff news make it difficult for risky assets to reach new merger and acquisition deals. Most crypto assets have performed poorly since the beginning of 2025, leaving investors with little interest. However, Bitcoin is one of the few bright spots.
Although venture capital transactions have decreased, merger and acquisition activities remain active. For instance, Coinbase Global announced on May 8th that it would acquire Deribit for 2.9 billion US dollars. This was a major merger and acquisition deal in the cryptocurrency field and set a new historical high for cryptocurrency mergers and acquisitions.
In addition, the excessively high valuations of crypto startups might also be one of the reasons for the decline in venture capital transactions. Many crypto startups are losing venture capital opportunities due to an excessively high ratio of valuation to revenue. Venture capitalists usually prefer lower valuations because they offer greater upside potential while carrying lower risks.
Related topic:
