💥😱Crypto venture capital funding surged to $4.8 billion in Q1 2025, marking the strongest quarter since late 2022, according to Galaxy's latest report. This represents a 40% increase from Q4 2024 and came alongside a 7.5% rise in the number of deals, totaling 446. A key driver was a massive $2 billion investment by UAE-based MGX into Binance, accounting for nearly half of all funds raised. Without this deal, total VC investment would have dropped to $2.8 billion — 20% below the previous quarter.
The Binance deal also marked a shift toward later-stage funding, which comprised 65% of all investments — the highest since Q1 2021 — while early-stage and pre-seed investments slightly declined.
Sector-wise, trading/exchange platforms dominated funding, fueled by the Binance deal, capturing nearly 48% of total capital. DeFi followed with $763 million, maintaining its relevance over gaming/Web3, which dropped to fifth place despite representing 16% of total deal count. Infrastructure and AI sectors also showed strength, each securing over 40 deals.
Geographically, the U.S. led in deal count with 38.6%, though Malta topped investment share (36.8%) thanks to the Binance deal. Despite the uptick, funding remains well below 2021 peak levels, with lingering caution from past market crashes and growing interest in AI drawing capital away. The availability of crypto-focused exchange-traded products (ETPs) also offers investors an alternative path for market exposure.
Galaxy analysts suggest that improved regulatory clarity—particularly in the U.S., where deregulatory efforts are already underway—could reignite stronger VC activity in the sector.
