Crypto venture dealmaking hit a new low in May, with about 50 transactions—the slowest pace since before 2021. But this is not just a bear-market mood swing. The drop in deal count says more about how venture funds are allocating capital in a changed environment. While the total money invested in crypto startups has stayed relatively elevated, the number of companies receiving checks has collapsed. Fewer rounds are getting funded, but the ones that do are generally larger and more concentrated among projects that can show traction, revenue, or a clearer path to scale. That means most early-stage founders are facing a much harder climb to secure funding—something the headline funding totals do not always reflect.
Competition from artificial intelligence is making it harder. More venture attention, capital, and partner time are now being channeled toward AI, making it even tougher for crypto teams to get meetings or make their case. For founders, the bar to raise money has moved higher. The capital is still there, but it is being allocated more selectively and with more discipline, while risk appetite for experimentation is low. Crypto venture capital is not drying up entirely, but the number of teams able to tap it has fallen to a five-year low as AI pulls more of the venture spotlight.