During the first quarter of 2025 Crypto VC funding achieved a total of $4.8 billion which turned out to be the highest quarterly numbers since Q3 2022.
Research from Galaxy indicates VC sector interest has increased substantially because funds allocated to crypto hit a 40% growth from Q4 2024. The quarterly increase in deals reached 446 for the first quarter while demonstrating a 7.5% growth against the previous quarter. Binance obtained a substantial portion of its Q1 funding from the $2 billion investment made by MGX fund which is managed by the United Arab Emirates. The $2 billion Binance investment contributed most of the Q1 funding amount because without this deal crypto investments would have declined to $2.8 billion which shows a 20% reduction from Q4 results.
Late-stage deals dominate funding trend
Through its investment MGX-Binance transformed the activity of crypto venture capital to center around funding older-stage companies in the market. In Q1 these businesses secured 65% of the invested capital which represented the first time these firms exceeded early-stage deals since Q1 2021. Total market activity indicated maturity even though pre-seed rounds decreased slightly in that time period. The trading exchange and lending category earned the most investment due to the Binance deal with a total value of $2.55 billion teaching 47.9% of the entire investment.
Investors continued their focus on DeFi through $763 million worth of investment as it preserved its position as a vital area of interest. The infrastructure and payment sectors alongside AI gained critical interest which overshadowed declining investment into gaming even though this segment contributed 16% of overall deals.
Regional trends show shifting dynamics
The United States received 38.6% of all venture capital deals as the main focus of VC interest worldwide. Eight point six percent of VC focus on the UK stood as the second highest among participating countries after the United States while Singapore and the UAE held 6.4% and 4.4% accordingly. The investment volume in Malta reached 36.8% due to the Binance deal thus leading the numbers. The US accounted for 24.7% of total venture capital investments but Hong Kong together with UK and Singapore took up the remaining percentages. Despite the quarterly growth, funding remains far below the levels seen during the 2021 bull market.
Analysts noted that the lasting effects of the 2022 and 2023 market collapses continue to influence capital allocation. Rising interest in AI and the availability of crypto exchange-traded products have also shifted investor preferences.Future investment may increase towards the US market following the establishment of clear regulatory framework. Ongoing deregulation initiatives will help the US establish stronger dominance in worldwide crypto startup financing operations.
The post Crypto VC Funding Hits $4.8B in Q1 2025, Boosted by $2B Binance Investment first appeared on Coinfea.
