Cryptocurrency Venture Capital Market Trend Analysis: Token Dominance and the Rise of Liquidity Investment

The current financing environment has become increasingly severe, primarily due to challenges in upstream capital returns and limited partner funding. Across the venture capital industry, funds at all stages have returned less capital to investors compared to previous years, leading to a decrease in the funds available for existing and newly established venture capital for investment, thereby exacerbating the financing difficulties for founders.

In the field of encryption venture capital, the number of transactions slowed down in 2025, but the pace of capital deployment remains roughly the same as in 2024. The decrease in the number of transactions may be related to many venture capital funds nearing the end of their life cycle and a reduction in available funds. However, some large funds are still making significant transactions, keeping the overall pace of capital deployment consistent with the previous two years.

In the past two years, M&A activities in the encryption field have continued to improve, creating favorable conditions for liquidity and exit opportunities. Recent large-scale mergers and acquisitions have provided more assurance for industry consolidation and the exit of encryption equity venture capital.

From the perspective of financing stages, accelerators and launch platforms lead in the number of transactions. Since 2024, a large number of accelerators and launch platforms have emerged in the market, which may reflect a tightening financing environment, with founders more inclined to issue Tokens early to start projects.

The median size of early financing rounds has rebounded. The pre-seed financing size has continued to grow year-on-year, indicating that funding in the very early stages remains abundant. The median financing sizes for seed, Series A, and Series B rounds have approached or rebounded to 2022 levels.

For the future of encryption venture capital, there are the following predictions:

1. Tokens will become the main investment mechanism: the market will shift from a "token + equity" dual structure to a "single asset carrying value" model.

2. The integration of fintech venture capital and encryption venture capital is accelerating: traditional fintech investors are expanding into the encryption space, focusing on next-generation payment networks, new digital banks, and blockchain-based asset tokenization platforms.

3. The Rise of "Liquid Venture": This investment model seeks venture capital opportunities in the liquid Token market, featuring higher liquidity, lower investment thresholds, more flexible position management, and fund operations.

The cryptocurrency sector will continue to lead innovation in venture capital. The integration of public and private capital markets is a major trend, and the crypto space is already at the forefront in this regard. As more assets are put on-chain, an increasing number of companies may choose "on-chain first" financing methods.

Finally, the return distribution of the encryption market tends to be more extreme than that of traditional venture capital, with top encryption assets not only competing to become sovereign digital currencies but also vying for foundational status in the new financial economy. Despite the higher risks, the potential for asymmetric returns will continue to attract substantial capital inflows into encryption venture capital.