Crypto venture capital positioning for fewer deals, bigger bets, and mergers ahead

Crypto venture capital funds are eyeing a wave of mergers in 2025 as investors focus on fewer, higher-quality bets.

Despite total funding holding steady at $10 billion in 2024, the number of deals fell 14% to 351, according to investment research firm PitchBook. Investors poured capital into early-stage startups, doubling median valuations to $52 million year-over-year, while late-stage firms secured just 5% of all funding rounds.

PitchBook described 2024 as a year of “growing investor selectivity” and expects consolidation among infrastructure providers, exchanges, and custody firms. Venture capitalists are particularly keen on two sectors: stablecoins and artificial intelligence.

Artificial intelligence

The AI sector is heating up.

Crypto-native and traditional VCs showed “outsized interest” in AI-related blockchain projects, a trend that gained momentum in the latter half of 2024.

The AI-crypto sector now boasts a $55 billion market valuation, with analysts predicting it could contribute an additional $20 trillion to the global economy by 2030.

Stablecoins

Stablecoins also remain a major draw for investors.

The sector has swelled to a $231 billion market valuation, with Tether’s USDT and Circle’s USDC ranking among the top 10 largest cryptocurrencies. Tether dominates with nearly 70% market share and has evolved into a financial powerhouse, posting $13 billion in profits last year.

Regulatory attention is intensifying.

On Tuesday, US Senator Bill Hagerty introduced a bill to establish rules for stablecoin issuers. Meanwhile, Donald Trump’s crypto adviser David Sacks signaled that passing stablecoin legislation is a priority for the administration.

Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.