VC Roundup: Amid crypto funding slump, stablecoin, RWA infrastructure draw capital
News Summary
Despite record institutional interest in digital assets, venture capital activity in the crypto and blockchain sector has slowed significantly since Q1. Galaxy Research's report indicates that crypto and blockchain startups raised $1.97 billion across 378 deals in Q2, representing a 59% decline in funding and a 15% drop in deal count quarter-over-quarter, marking the second-lowest quarterly total since Q4 2020. Researchers noted a breakdown in the long-term correlation between Bitcoin’s price and venture capital investment in the sector, attributing this disconnect to waning VC interest and a market narrative increasingly prioritizing Bitcoin accumulation over other investments. Concurrently, Insights4VC data reveals a shift in capital flows, with digital asset treasury companies attracting $15 billion by August 21 to build holdings of Bitcoin, Ether, and other tokens. Against this backdrop, this month's VC Roundup highlights notable funding rounds in onchain finance, real-world assets (RWAs), and stablecoin infrastructure. This includes Mavryk raising $10 million for institutional RWA tokenization, Grvt closing a $19 million Series A for privacy-preserving onchain finance, Stablecore securing $20 million to facilitate stablecoin adoption for banks and credit unions, and Plural raising $7.13 million to bridge real-world energy assets with digital markets.
Background
The cryptocurrency market experienced a surge in institutional interest in 2024, yet 2025 has seen a notable slowdown in venture capital funding activity. Investor sentiment is shifting, with a demand for startups to demonstrate clearer revenue paths and sustainable business models, rather than solely relying on token speculation or long-term visions. Concurrently, Real-World Asset (RWA) tokenization and stablecoin infrastructure are gaining traction as increasingly vital bridges between blockchain technology and traditional finance. RWA tokenization aims to represent real-world assets like real estate and energy assets as onchain tokens to enhance liquidity and accessibility. The US GENIUS Act, cited by companies like Stablecore, is seen as a significant milestone for the stablecoin industry, potentially accelerating adoption among traditional financial institutions.
In-Depth AI Insights
What are the deeper implications of the current crypto VC slump for startup valuations and innovation trajectories? - The heightened investor caution signals a period of more rigorous scrutiny and potential downward adjustments for crypto startup valuations. - Capital will increasingly concentrate on projects with clear revenue models and real-world problem-solving capabilities, such as RWA and stablecoin infrastructure, rather than high-risk, experimental protocols. - This might temper broad-spectrum innovation in the short term but will foster the development of more utilitarian and sustainable business models, pushing the industry towards maturity. What does the rise of Digital Asset Treasuries and their divergence from VC funding flows signify for the crypto market structure? - The proliferation of digital asset treasuries indicates institutional investors' preference for direct holding of core crypto assets (Bitcoin, Ethereum) as strategic reserves or macro hedges, rather than equity investments in nascent projects. - This trend reinforces the market dominance of a few leading crypto assets, potentially leading to a 'winner-take-all' dynamic that squeezes out long-tail projects. - It also reflects a market preference for 'crypto-native' risk exposure over traditional equity risk, suggesting the crypto market is developing its unique capital allocation logic, decoupled from traditional VC investment cycles. How will the accelerated development of RWA tokenization and stablecoin infrastructure reshape the future of traditional finance? - RWA tokenization has the potential to significantly enhance the liquidity, composability, and global accessibility of traditional assets (e.g., real estate, energy), attracting a broader range of institutional investors and blurring the lines between traditional and digital assets. - The widespread adoption of stablecoin infrastructure will enable banks and credit unions to process digital payments and settlements more efficiently, reduce transaction costs, and potentially foster new financial products and services. - This represents not just a technological upgrade, but a strategic move by traditional financial institutions to gain a competitive edge and new growth points in the digital economy, potentially accelerating the tokenization of the traditional financial system and challenging existing intermediaries.