US Firms Gobble Up 72% of Crypto’s $4.9B Q1 Funding Bonanza

Wall Street’s late-stage crypto FOMO hits warp speed as American VCs dump $3.5B into blockchain startups—because nothing says ’innovation’ like institutional money chasing retail’s coattails.

• DeFi and infrastructure projects nabbed 60% of total funding

• Seed rounds cratered 40% as Series C deals tripled

• Asian investors quietly doubled down on privacy protocols

Turns out the ’decentralized’ future still runs on good old-fashioned US dollar hegemony. Who could’ve seen that coming?

MGX’s $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 Bitcoin’s 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 2022–2023 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 year’s fundraising figures.