Analyst: Crypto VC Deployments in 2023–2025 Equaled 2022 Fundraising; 85% of 2025 Tokens at a Loss
Galaxy Research data and crypto commentator Edgy report that venture capital activity in crypto has sharply slowed since 2022. In Q2 2022, crypto VCs raised nearly $17 billion across 80+ new funds; since then new fund formation has hit a five-year low and quarterly fundraising dropped to just 12% of that Q2 2022 peak. Last quarter’s $8.5 billion in VC investment largely came from leftover capital raised in 2022 rather than new LP commitments. Cumulatively, capital deployed from 2023–2025 roughly equals the total capital raised in 2022. Edgy also notes that 85% of tokens issued in 2025 are trading at a loss, with many VC-backed projects merely breaking even or losing money. The piece argues that the era of fundraising, token issuance and retail sell-offs by insiders is waning; as VC influence recedes, projects with real users and revenue — and fairer token distribution — are likely to prevail. Key implications for traders: reduced fresh VC capital may lower speculative issuance and sell pressure; emphasis will shift toward on-chain metrics, revenues and sustainability.
Bearish
The news points to reduced fresh VC inflows, lower new-fund formation, and that a large share of recent token issuances (85% in 2025) are underwater. Fewer new VC commitments and the fact that recent deployments are drawn from prior war-chest capital suggest diminished growth funding and lower speculative capital entering the market. Historically, drops in VC funding and fundraising (e.g., post-2018 crypto winter) correlated with reduced issuance, higher volatility and downward price pressure as insider selling and uncertainty increased. In the short term, expect reduced liquidity for new token listings, potential price weakness for VC-backed projects, and increased sensitivity to on-chain revenue metrics. Over the medium-to-long term, the market may reprice toward projects with real users and revenue, which could benefit fundamentally strong tokens but hurt purely speculative or distribution-heavy projects. Overall, the immediate outlook is bearish due to lower capital supply and elevated token losses, though a cleaner market structure could be healthier long-term for quality projects.