Crypto funding hits $4.9B in Q1 2025 with US firms leading the charge
Crypto venture funding reached $4.9 billion in the first quarter of 2025, marking a strong comeback for the industry, according to a May 1 report by Galaxy.
The total capital raised was 40% higher than the previous quarter and came from 446 deals, which also reflected a 7% growth during the period. This makes the first quarter the most active period for crypto fundraising since late 2022.
MGXs $2 billion investment in Binance was a major contributor to this figure, which accounted for over 40% of the capital raised. Excluding this single deal, first-quarter funding would have stood at $2.8 billion, reflecting a 20% decline compared to the fourth quarter of 2024.
Crypto investments by category
The Binance investment pushed the Trading, Exchange, Lending, and Investing sector to the top of the funding chart. This category attracted $2.55 billion, with a 47.9% growth rate. If Binance is excluded, the DeFi sector would have led the quarter with $763 million in capital inflows.
Web3-related projects saw the highest number of deals. These included gaming, NFTs, DAOs, and metaverse initiatives, with 73 rounds representing 16% of all transactions. Trading-related firms followed with 62 deals.
Galaxy also reported a shift in investor focus. For the first time since the first quarter of 2021, most of the capital, about 65%, went to later-stage companies. Early-stage rounds, mainly pre-seed deals, saw a slight dip but remained strong compared to previous cycles.
US startups dominated the funding scene, accounting for 38.6% of the total deal count. The UK came next with 8.6%, while Singapore and the UAE followed with 6.4% and 4.4% respectively. The uptick in US investment may reflect growing government support for digital assets.
Bitcoin price correlation
The report noted a recovery in the correlation between Bitcoins price movements and venture investment. The trend, which had weakened since early 2023, shows signs of strength over a multi-year horizon.
Galaxy also said that fundraising remains difficult despite the year-over-year growth. Factors such as cautious allocator sentiment and the lingering impact of the 20222023 downturn continue to weigh on the market.
Additionally, the rise of AI has shifted investor focus away from crypto. The AI sector now commands the level of attention that crypto held in 2021 and early 2022. This is evident with the decline in funds raised by crypto-focused venture funds, which fell to $1.9 billion during the first quarter.
Despite these challenges, Galaxy remains optimistic, noting that 2025 is already on pace to outdo the previous years fundraising figures.
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Text source: CryptoSlate
