Cointelegraph Research has recently published a data-packed report outlining the current state of fundraising in the crypto sector and significant VC trends in 2025. The report indicates that venture capital investments in Web3 companies doubled in 2025 compared to the previous year, largely fueled by institutional interest, especially in the real-world asset (RWA) sector, which attracted over $2.5 billion. Additionally, the report notes an increase in mergers, acquisitions, and large corporate financing initiatives.

Overview of Crypto Venture Capital in 2026

In the year 2025, the total venture capital funding in crypto startups surpassed $8 billion per quarter, marking a first since 2022. Overall funding for the year reached over $34 billion, a significant increase from the $17 billion recorded in 2024. Despite this growth, 2025 is still viewed as a year of caution as investors leaned towards bonds and safe-haven assets amidst geopolitical tensions and high interest rates.

VC Trends

Due to the lower appetite for risk, venture capitalists have shifted their focus. In 2025, fund managers favored sustainable revenue models, genuine user engagement metrics, and strong product-market fit over projects with early traction but unreliable revenue. This shift is evident as seed funding dropped by 18%, while Series B funding surged by 90%, indicating a deeper involvement of investors in projects and a better emphasis on ecosystem development rather than early-stage experiments.

The Prominence of Real-World Assets (RWA)

Tokenization of real-world assets has evolved to become a vital sector over the last three years. Data from RWA.xyz shows that tokenized RWAs have exceeded a market capitalization of $38 billion, a staggering increase of 744% from $4.5 billion in 2022. RWAs are now recognized as one of the fastest-growing segments within the crypto industry, outpaced only by stablecoins. Nevertheless, the RWA sector is still small in comparison to the $156 trillion in fixed-income and $146 trillion in global equity markets, suggesting ample space for continued growth.

On the funding side, signs of change are reflected in the annual funding amounts. In 2025, VC funding for RWA tokenization projects exceeded $2.5 billion.

Declining Interest in Ethereum Layer 2 and Modular Infrastructure

While overall VC interest in the crypto market has risen, some narratives are showing clear signs of decline. In 2022, Ethereum layer 2 projects gained more than $1.2 billion, but this funding dropped to $387 million in 2023 and $587 million in 2024. In 2025, it fell dramatically to $162 million, representing a 72% decrease from the previous year.

Layer 2 Trends

This decline can likely be attributed to the rapid emergence of layer-2 blockchains, resulting in a crowded landscape and reduced VC interest in this technology. As the number of Layer 2 chains surpassed 50, the demand for blockspace became saturated.

For further insights on which sectors are experiencing a drop in VC interest, check the latest Cointelegraph Research report.

Special thanks to Canton Foundation, CryptoRank, DWF Labs, Everest Ventures Group, Mercuryo, and RWA.xyz for their contributions to this report.