Author: Dara, Managing Partner @HashgraphVC

Translation: Deep Tide TechFlow

Deep Tide Introduction: Derek, Managing Partner of Hashgraph Ventures, uses a set of counterintuitive data to break down the true face of crypto VC in 2025: total financing skyrocketed by 433%, but the number of active investors plummeted from 5,500 to 377, and the middle rounds almost disappeared. AI siphoned off 61% of global VC funds, and even Paradigm is expanding towards AI and robotics. For those who remain, the early investment window with the least competition in recent years has emerged.

First, let's look at the numbers because they are crazy

The total amount of crypto VC financing in 2025 soared by 433% to reach $40-50 billion, compared to only $9.33 billion the previous year.

Interestingly, the number of disclosed investment projects in 2025 was only 898, a 42% reduction from 1,551 in 2024. Fewer projects but larger individual investments. The money was not spread out but concentrated instead. This indicates that the power structure has changed.

Who else is investing? There are far fewer people than you think

This data is worth noting for everyone seriously engaged in investments: only 377 independent investors participated in transactions last quarter. For the whole year of 2022, this number was nearly 5,500. Of course, comparing one quarter to four quarters isn't entirely fair, but the trend is evident; the field is empty.

The power has tipped entirely in favor of VCs. Now investors are choosing projects, which is a complete reversal from 2021 and 2022. Back then, funds had to actively create buzz, promote Twitter Spaces, and practically beg founders for money. Those days are gone. Now founders are coming to find you.

What are the institutions with money doing? They are saving their bullets for Series A and later rounds, investing in projects that have already gained traction. I understand the logic. But this also means that if you are willing to bet on earlier stages, you are facing almost no competitors.

Is anyone still investing in early rounds?

To be honest, the situation is complex. Pre-seed rounds have continued to decline over the past three years, dropping from 8.55% of total transactions to 6.61%. The review standards have increased, and the money that just wanted to join the fray has withdrawn.

However, in Q4 2025, Pre-seed still accounted for 23% of total transaction volume, which is still relatively healthy for new projects. The early deal flow hasn't died; what's gone is the era of "writing checks simply upon seeing a white paper."

The market has already differentiated. Most transactions are still below $10 million, but a small number of super-large rounds of $50 million or even over $100 million have taken a majority of the funds. It’s either go big or stay small; the middle ground has disappeared. Conversely, if you truly understand early stages, it’s an opportunity because the big funds have all gone to late stages.

Why have the weak left, and will they not return

There has been an invisible reshuffle, driven primarily by AI. OECD data shows that in 2025, AI companies attracted $258.7 billion in venture capital, accounting for 61% of total global VC funds, doubling from 2022. Sixty percent of global venture capital is flowing into one track, and under this gravitational pull, those who were sitting on the fence have naturally followed suit. They will not return unless they can fit their projects into an AI narrative.

Paradigm is the most credible purely crypto fund in the industry, and they recently raised $1.5 billion for a new fund, explicitly including AI and robotics in their investment scope. They may say it's complementary; maybe it is. But even the truest Crypto Native funds are hedging their identities.

What does this leave for the remaining people? Less competition, better deals.

Speed and belief, the only two important things now

The pace of transactions changed in 2025. Deals that used to close in 2-3 weeks now take 2-3 months. It sounds slower, but the actual meaning is quite the opposite. When a good project comes out, the funds that have waited for a long time will quickly flood in. The groundwork is done before the deal appears, not after.

In Q4, 11 transactions over $100 million accounted for 85% of the season's funds, with $7.3 billion divided among 11 projects. If you don't sit at the table with belief before the rounds close, you will only read these numbers in the news later. This is how the market operates now.

There is another key change: the real volume of financing in 2025 began after the White House delivered a friendlier signal towards crypto, not after the Bitcoin price surge. The correlation between BTC price and VC activity has been severed. Now what drives capital is regulatory clarity and structural belief.

Conclusion

2025 is a year that filters the market. The number of active investors collapsed, funds that were just joining in withdrew, generalist firms chased after AI, and large funds moved to late rounds, leading to a decrease in the number of transactions. However, it is precisely because of these changes that the total capital deployed has surged.

Those remaining in the field are people with genuine arguments, real networks, and true beliefs. The demand for investable projects in 2026 may exceed supply. What we face is not "too much money chasing too few ideas," but "too few disciplined investors facing a wave of companies that are building on the crypto track, have infrastructure-level capabilities, can generate revenue, and meet regulatory requirements."

Web 2.5, trade, stablecoins, payments — because this is the only track in this market that has successfully scaled its fundamentals.

The weak have already left the stage. Opportunities are right in front of us. The only question is who has the courage to go all in.