Crypto VC Funding Hits 4-Year Low: April Marks Slowest Investment Pace Since 2021

Venture capital flows into crypto startups dried up to levels not seen since the last bear market, with April’s funding totals plunging to a four-year minimum. The slowdown comes despite Bitcoin’s 2024 rally—proving once again that Wall Street’s ’smart money’ always shows up late to the party.

While retail FOMO drives price action, institutional investors remain skittish. The disconnect between asset prices and funding activity suggests VCs are either waiting for clearer regulatory signals or have finally learned not to chase tops.

VC funding decouples from crypto market trends

In previous market cycles, VC funding has been an indicator of the overall investor hype. During bull markets, it is much easier for startups to gain funding, with the expectation of a liquid market and a rapidly appreciating token. 

The path of VC funding was met with more skepticism as the available liquidity for tokens diminished. Insider selling also kept investors away from VC-backed projects. Additionally, securing listings is becoming more difficult due to an oversupply of tokens. 

Some projects also choose the path of creating a meme token, doing away with the complexities of security law. Meme tokens also do not oblige the project to provide utility, staking, or other use cases. 

VC funding shifts to global rounds

In the past year, undisclosed international funding rounds challenged the leading position of the US market. Despite the reportedly improved US crypto regulations, fundraising shifted to other locations. 

In the first four months of 2025, undisclosed location rounds gathered $4.99B, followed by $2B in rounds located in Malta. The USA was in third place with $1.85B in new fundraising. 

VC funds are becoming more selective, choosing projects with more advanced products. Some also choose a tokenless approach, avoiding the trap of increasing fully diluted value and token inflation. Animoca Brands lost its leading position, instead leaving Coinbase Ventures with the biggest number of rounds in the year to date. Coinbase Ventures led a total of 24 deals, while Animoca Brands lagged with just 18. 

Interest in new projects is shifting, but in the past year, most regions saw a decreasing number of deals. In April, new deals increased in Canada and the Euro area but decreased in the USA and other previously hot regions. 

As VC-backed new projects diminish, the crypto market aims to reawaken previously hot tokens, some of which managed to raise significant funding. Utility tokens are still competing with memes and BTC, as investors are still avoiding long-term holding in fear of protracted bear markets. 

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