Crypto-focused VC investment surged to $4.65 billion in the third quarter of 2025, marking the second-highest quarterly total since 2022, according to a new report from Galaxy Digital. The data points to a cautious but clear return of confidence in blockchain startups after a prolonged period of market uncertainty and reduced deal activity.
The report highlights a shift from defensive positioning towards selective optimism. Investors are targeting projects with defined revenue models, strong technical foundations, and practical use cases. This approach reflects a broader maturation of the crypto VC ecosystem, where scale and sustainability now carry more weight than speculative hype.
The bump in funding was sharp; capital deployed grew by 290% quarter-over-quarter, rising from the previous quarter’s much lower figure. At the same time, deal activity remained healthy, with 415 deals closed in Q3, according to the report.
Galaxy notes that just seven large deals accounted for almost half of the total capital invested in the quarter. The most significant rounds included a $1 billion raise for Revolut and $500 million for Kraken, followed by major investments in firms such as Erebor, Treasury, Fnality, Mesh Connect, and ZeroHash.
This heavy concentration of capital in a few well-established firms signals that investors are placing big bets on established companies, rather than spreading their bets across many early-stage startups.
The report reveals a clear shift in investor appetite: 56% of the capital went into later-stage companies, while 44% supported earlier-stage firms.
This trend suggests growing maturity in the crypto VC landscape. Pre-seed deal count remained stable, indicating that founders are still raising early, but the majority of funding is now flowing to more developed, growth-focused companies.
Despite macro headwinds, valuations in the crypto startup space made a strong showing. The median deal size in Q3 was $4.5 million while the median pre-money valuation reached $36 million, nearing the highs of the 2021 bull market.
These figures point to growing confidence from investors, especially in later-stage projects that have already proven their models.
Where the Money Went: Categories and Regions
Galaxy reports that the trading, exchange, investing, and lending category drew in the largest share, more than $2 billion, fuelled particularly by the Revolut and Kraken rounds.
Other sectors also saw healthy activity. Stablecoins, blockchain infrastructure, artificial intelligence, payments, and tokenisation. Web3, NFTs, and gaming remain in the mix, but they are not the centre of gravity they once were.
Geographically, American companies dominated. According to the report, 47% of all capital in Q3 went to firms headquartered in the United States, followed by 28% to the United Kingdom, 3.8% to Singapore, and 3.3% to the Netherlands.
In terms of deal count, 40% of the deals were U.S.-based, followed by Singapore (7.3%), the U.K. (6.8%), and Hong Kong (3.6%).
Fundraising for Crypto-Focused Venture Funds Struggled
Even as deployed capital rose, the fundraising environment for crypto-focused venture funds remained challenging. In Q3, investors allocated $3.16 billion across 16 new crypto venture funds.
The report highlights competing pressures: traditional allocators are now drawn to ETFs and digital-asset treasury companies, which may be syphoning capital away from early-stage venture funds.
Galaxy’s analysts conclude that despite the rise in activity, crypto venture capital is not yet back to the heady days of 2021–2022. The macro backdrop remains tough, and fresh regulatory uncertainty could weigh on allocations.
Still, sectors like stablecoins, AI, and blockchain infrastructure are reliably attracting investor interest. There’s also healthy early-stage engagement, even if most capital is now skewed toward later rounds.
Geographically, the United States has retained its dominance, and Galaxy suggests that a pro-crypto regulatory push may further entrench that lead.
Overall, Q3 2025 saw a sharp rebound in crypto venture capital, with $4.65 billion flowing into the sector. That said, investors are favouring big, mature players, and fundraising for new funds faces growing competition from non-VC vehicles. The report suggests that while the crypto VC ecosystem is recovering, it is evolving.