The cryptocurrency sector has made headlines with a reported $50.6 billion raised in 2025, marking a significant increase from the previous year. However, a closer examination reveals that this figure is largely inflated due to a concentration of funds within a small number of mergers and acquisitions (M&A). The annual Crypto Fundraising Report indicates that 43.7% of this capital originated from just 21 M&A deals.
Traditional venture capital and private investments contributed $23.3 billion across 829 transactions, while public sales and IPOs added $5.2 billion from 155 deals. The stark contrast between these numbers highlights a troubling trend: almost half of the capital influx was directed towards consolidating established players rather than fostering new experimental projects.
The report also noted a 12.6% year-over-year decline in total deal count, falling from 1,612 in 2024 to 1,409 in 2025. Notably, M&A activity accounted for an impressive 83% of the increase in capital, even as the number of funding rounds sharply decreased. This suggests that the market is not seeing a resurgence of innovative startups but rather a consolidation of existing ones.
Multiple data trackers provided varying totals for fundraising in 2025, with DefiLlama reporting over $25 billion raised. Their methodology specifically includes token, equity, or warrant raises, while excluding NFT sales and OTC transactions. Meanwhile, Architect Partners highlighted that disclosed M&A considerations reached $37 billion, a staggering increase from the previous year, with transaction counts soaring by 74%. This discrepancy in figures underscores the differences in how various reports define fundraising and M&A activity.
The landscape of venture capital within the crypto space is evolving, as evidenced by a 21% decrease in deal count for VC and private investments, dropping from 1,050 in 2024 to 829 in 2025. Despite this drop, total capital for VC rose to $23.3 billion, indicating a trend towards larger funding rounds. Architect Partners reported that rounds exceeding $100 million now account for more than half of all capital raised, a significant shift towards fewer but larger investments.
The current funding landscape indicates a preference for established companies that have already navigated regulatory and market challenges. Categories attracting the most investment include Finance/Banking, Payment, Infrastructure, and Asset Management, reflecting a pivot from building new platforms to enhancing existing frameworks. The report indicates that stablecoin supply hit $311 billion, with tokenized US Treasuries nearing $10 billion, signifying a move towards more stable, compliance-ready investments.
2025 is framed as a pivotal year where traditional finance is entering the crypto space through “bridge M&A,” allowing established financial players to acquire regulatory clarity and technologies rather than building them from scratch. Notable acquisitions, such as those by Polygon targeting payment systems and infrastructure, exemplify this trend, demonstrating that purchasing established firms can expedite entry into the market.
Looking ahead to 2026, the outlook is shaped by three potential scenarios. The base case anticipates stable growth in M&A, while the bull case envisions a surge in M&A activity driven by strategic acquisitions in payments and custody sectors. Conversely, the bear case warns of a decline in M&A activity should financing conditions worsen. Key indicators to observe include the status of the IPO market and regulatory developments surrounding stablecoins, which could significantly impact the trajectory of M&A and investment activity in the crypto industry.
The data indicates that the crypto industry is maturing, with a clear shift from speculative ventures to a focus on consolidation and infrastructure. As nearly half of the capital flows into acquisitions, it is evident that the market is betting on crypto as a foundational component of the financial system rather than a standalone economy. This transition, while not indicative of failure, marks a significant evolution in the industry.
