Crypto VC activity experienced a significant slowdown in May 2025, hitting the lowest point since January 2021 in terms of deal volume. Analysts attribute this trend to a mix of market-specific challenges, macroeconomic pressures, and seasonal factors, even as the month saw robust fundraising totals.
Deal Volume Hits a Low
Data from RootData revealed that only 62 crypto investment rounds were completed in May, marking a notable dip from previous months. This figure stands in stark contrast to the year’s high of 78 rounds in March. Despite the lower deal volume, May’s fundraising totalled over $909 million, making it the second-best month of 2025 in terms of value, behind March’s $2.89 billion.

Experts point to waning investor sentiment as a key driver of the downturn. Aurelie Barthere, principal research analyst at Nansen, highlighted that both market sentiment and asset prices peaked in January but have struggled to recover since. Tariff concerns in late May further added to the challenges, creating a challenging environment for deal closures.
Macro Factors Exacerbate the Slowdown
The slowdown in VC deals is compounded by broader macroeconomic challenges. Persistent high policy rates, volatile bond markets, and renewed tariff disputes have dampened risk appetite, according to Patrick Heusser of Sentora.

“These conditions make it harder for new deals to materialize,” said Heusser, adding that most transactions are currently consolidation plays. This pattern, he noted, often emerges in cooling markets where price volatility is muted.
Mergers and Acquisitions Provide a Bright Spot
While venture capital deals declined, merger and acquisition (M&A) activity in the crypto sector remained robust. Coinbase’s $2.9 billion acquisition of Deribit on May 8 marked a new record for crypto M&A transactions. The deal underscores a growing trend toward direct corporate agreements rather than traditional VC funding.

Nansen’s Barthere emphasized that regulatory clarity is driving this shift, facilitating significant deals between major players and blockchain protocols. “These direct deals are bypassing the VC market,” she explained, suggesting a possible evolution in how capital flows within the sector.
Seasonal Trends Could Signal a Rebound
Despite the current slump, industry experts are optimistic about a potential recovery later in the year. Marcin Kazmierczak, COO of blockchain oracle firm RedStone, noted that seasonal patterns may play a role in the slowdown.

“Summer is often a quiet period for deals,” Kazmierczak remarked. “Activity typically picks up in early Q4 when investors return from summer breaks, and historically, this is when some of the best deals are finalized.”
The muted performance of most crypto assets this year, with Bitcoin being a rare exception, has also contributed to the cautious approach by investors. However, the anticipated end-of-year resurgence could bring renewed momentum to the sector.