Cryptocurrency investment deals fell to their lowest point of 2025, as analysts cited a mix of market-specific and macroeconomic factors behind weakening venture capital (VC) activity.
Only 62 rounds were completed in May, a monthly low last seen in January 2021, according to data from crypto analytics platform RootData.
Despite the drop, the 62 investment rounds still raised more than $909 million, making it the second-best month of the year by value, trailing only March’s $2.89 billion across 78 rounds
The slowdown is likely a “combination of market prices and sentiment,” as both “peaked at the end of January and rebounded only in April, before ranging from May 23 on deterioration of tariff rhetoric,” said Aurelie Barthere, principal research analyst at crypto intelligence platform Nansen.
A challenging “macro backdrop” paired with “higher-for-longer policy rates, jittery bond markets and fresh tariff headlines have made it harder for risk assets to get new M&A deals over the finish line,” according to Patrick Heusser, head of lending at Sentora and a former investment banker:
“Most of the transactions we are seeing are consolidation plays, a pattern that typically emerges in cooling markets or after extended periods of range-bound pricing.”
The disappointing year-to-date performance of most crypto assets added to the lack of interest, with Bitcoin (BTC) “standing out as a rare bright spot,” he added.
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M&A activity remains strong
Despite the drop in venture deals, merger and acquisition activity remained robust. Coinbase Global acquired Deribit for $2.9 billion in a traditional merger and acquisition (M&A), the exchange announced on May 8.
“I also see many large deals going through the traditional liquid channels,” said Nansen’s Barthere, adding that more crypto regulatory clarity will benefit “direct deals between large companies and protocols, away from the VC market.”
The $2.9 billion marks a new all-time high for crypto M&As, according to RootData sourced by Blockworks.
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The slowdown in VC deals may also be a function of “seasonal patterns,” for May and June, according to Marcin Kazmierczak, co-founder and chief operations officer at blockchain oracle firm RedStone.
“Macro conditions certainly play a role, but I’d expect activity to pick up again as we head into early Q4; that’s historically when the best deals get done and investors return from summer mode,” he told Cointelegraph.
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