Crypto VC Funding Doubled in 2025 — Here’s Where the Smart Money Went

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• Crypto VC funding doubled in 2025, topping $34 billion.
  
• Real-world asset tokenization attracted over $2.5 billion in VC capital.
  
• Investor focus shifted toward later-stage, revenue-generating projects.

Venture capital is flowing back into Crypto — but with sharper focus and tougher standards. According to Cointelegraph Research’s latest report, VC funding into Web3 startups doubled in 2025, signaling renewed confidence after two cautious years. Yet this rebound wasn’t driven by hype. Instead, investors concentrated capital into fewer, more mature projects, with real-world asset (RWA) tokenization emerging as the clear winner.

Total crypto VC funding surpassed $34 billion in 2025, up from $17 billion in 2024. For the first time since 2022, investments exceeded $8 billion in every quarter. Even so, the year remained broadly “risk-off,” as institutional investors favored bonds and commodities amid geopolitical tension and high interest rates. Crypto’s funding surge therefore stands out as a selective, conviction-driven move rather than a return to speculative excess.

Investors Shift Toward Proven Business Models

One of the clearest changes in 2025 was how venture capital was deployed. Fund managers moved away from early-stage experimentation and leaned into startups with clear revenue paths and measurable traction. Seed-stage funding fell 18% year over year, while Series B rounds jumped 90%, highlighting deeper investor involvement and longer-term commitment.

This shift reflects a broader reassessment of crypto business models. Growth at all costs is no longer enough. Instead, VCs are prioritizing sustainable revenue, organic user growth, and strong product-market fit — criteria that mirror traditional tech investing more closely than past crypto cycles.

Real-World Assets Emerge as a Core Crypto Sector

RWA tokenization has moved beyond narrative status into a fast-growing sector. Data from RWA.xyz shows tokenized real-world assets have reached over $38 billion in market capitalization, up from just $4.5 billion in 2022. While still small compared to global bond and equity markets, the growth rate suggests significant long-term potential.

That momentum is reflected in funding. VC investment into RWA-focused projects exceeded $2.5 billion in 2025, driven largely by institutional interest. For many investors, RWAs offer a clearer bridge between traditional finance and blockchain infrastructure — and a more predictable revenue profile.

Also Read: New $100M Archetype Fund to Fuel DeFi, RWAs, and the Next “Crypto ChatGPT”

Layer-2 and Modular Infrastructure Lose Momentum

Not all crypto narratives benefited from the funding rebound. Ethereum layer-2 and modular infrastructure projects saw a sharp decline in VC interest. Funding dropped to $162 million in 2025, down 72% from the previous year. After years of rapid expansion, the L2 landscape has become crowded, with more than 50 networks competing for limited blockspace demand.

As a result, many investors appear to be stepping back, waiting for consolidation or clearer differentiation before committing new capital.

The data suggests crypto venture capital is entering a more disciplined phase. Capital is available, but it’s chasing scalability, real-world integration, and durable economics — not raw experimentation. If that trend holds into 2026, RWAs and later-stage Web3 startups may continue to dominate the VC landscape.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.