Crypto startups have collectively raised $95 million in recent funding rounds, with prediction markets and AI agent projects leading.
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The fundraising activity comes against the backdrop of a broader crypto market downturn, with the total market capitalization hovering around $2 trillion — a environment that investors say is producing more favorable deal terms for backers willing to deploy capital.
According to DL News, investors are capitalizing on the downturn by negotiating better terms from the projects they fund.
Yat Siu, co-founder and executive chairman of Animoca Brands, described the current fundraising climate as one where deal terms have become "more attractive" for investors compared to the frothy conditions of previous bull cycles.
Prediction Markets and AI Agents Lead the Pack
The $95 million raised was not spread evenly across crypto subsectors.
Prediction markets and AI agent projects emerged as the dominant categories attracting investor interest. Both sectors have seen growing user adoption and developer activity over the past year, making them standout verticals even as broader market sentiment has cooled.
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Prediction markets gained significant mainstream attention following the 2024 U.S. presidential election cycle, during which platforms like Polymarket saw record trading volumes. The sector's ability to generate real utility and user engagement — rather than relying purely on speculative token dynamics — has made it a compelling thesis for venture capital allocators looking for durable business models in crypto.
AI agents, meanwhile, represent the intersection of two of the most capital-intensive technology trends of the current cycle. Projects building autonomous onchain agents capable of executing trades, managing portfolios, or interacting with DeFi protocols have attracted attention from both crypto-native funds and crossover investors with exposure to the broader AI boom.
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Downturn Dynamics: Buyer's Market for VCs
The current fundraising environment stands in stark contrast to the conditions seen during the 2021 bull market, when crypto startups routinely commanded sky-high valuations and investors competed aggressively for allocation in oversubscribed rounds. With the total crypto market capitalization significantly off its peaks, the power dynamic has shifted.
Deal terms have become "more attractive" for investors amid the $2 trillion crypto market downturn, according to Animoca Brands co-founder Yat Siu.
For startups, the implication is clear: raising capital remains possible, but founders are likely accepting lower valuations, more investor-friendly token unlock schedules, or other concessions that would have been difficult to negotiate during periods of market exuberance.
This pattern is consistent with venture capital behavior across technology sectors more broadly — downturns compress valuations and give investors greater leverage at the negotiating table.
Historically, some of the most successful crypto companies were funded during bear markets. Projects like Solana, Aave, and others secured early-stage capital during periods of depressed sentiment, ultimately delivering outsized returns when market conditions improved.
Investors deploying capital now appear to be making a similar bet — that the current downturn offers an opportunity to build positions in high-quality projects at discounted entry points.
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Broader Venture Capital Trends in Crypto
The $95 million in raises is a notable data point but represents a fraction of the capital that flowed into crypto startups during peak periods. In 2021 and early 2022, crypto venture funding routinely exceeded $2 billion per month across the industry.
The current pace suggests that while investor appetite has not disappeared, it has become significantly more selective.
Several trends are shaping where that selective capital is going:
Infrastructure and tooling projects continue to attract steady interest, particularly those focused on scaling solutions and cross-chain interoperability.
Real-world asset (RWA) tokenization remains a high-conviction thesis for institutional-grade investors.
DeFi protocols with demonstrated revenue models and sustainable tokenomics are finding it easier to raise than those reliant on incentive-driven growth.
AI-crypto convergence projects are benefiting from the broader AI narrative, though investors are increasingly scrutinizing whether the crypto component adds genuine value.
The shift toward sectors with demonstrable product-market fit — prediction markets with real users, AI agents with functional use cases — suggests that the era of funding projects based primarily on whitepapers and token speculation has continued to recede. Investors appear to be prioritizing traction and revenue potential over narrative alone.
