[US Morning Briefing] Bitcoin Price Deviates from VC Investment Trends

Welcome to the US Cryptocurrency Morning Briefing. We'll briefly summarize today's important cryptocurrency news.

Despite market volatility, new funds are pouring into cryptocurrency startups. Investors are heavily betting on blockchain's long-term growth, from AI-based DeFi to tokenized assets.

Cryptocurrency Venture Investment at 5-Year Low

According to Galaxy Research's latest figures, cryptocurrency venture capital recorded its slowest quarter in 5 years. In the second quarter of 2025, less than $2 billion was injected into this sector. This represents a sharp decline compared to the beginning of the year, with some attributing it to statistical anomalies.

The total amount for the first quarter was inflated by a single $2 billion mega investment in the Binance exchange. Even after adjusting for this, the slowdown persists, with data suggesting investors are taking a more cautious approach.

Why the caution? Several factors are at play.

• The global economy remains unstable.
• Competition with the rapidly growing AI sector is fierce.
• Some major institutions are choosing simpler cryptocurrency investment methods like Bitcoin and Ethereum spot ETFs.

Interestingly, the largest investment proportion went to more established companies rather than early-stage startups.

The cryptocurrency mining sector unexpectedly gained attention, drawing in over $500 million. The largest portion came from XY Miners' $300 million fundraising, backed by Sequoia, a cloud mining operator.

Galaxy Research analysts say the increasing demand for computing power from AI is giving new importance to mining.

Meanwhile, the US has again taken the lead in funding and transaction numbers, followed by the UK, Japan, and Singapore. Startups established in 2024 closed the most deals, while companies from 2018 onwards attracted the largest funding rounds.

This suggests that performance remains crucial in the cautious cryptocurrency market.

Bitcoin Rally Not Driving Cryptocurrency Venture Funding

Beyond startups, venture funds also experienced a challenging quarter. While fundraising for new cryptocurrency-focused funds slightly increased, the number of new funds remained at a multi-year low.

The launched funds were generally larger, suggesting fewer players are raising funds but are more successfully convincing sponsors.

High interest rates, memories of the 2022-2023 downturn, and changing investor priorities continue to impact fundraising.

AI is capturing attention and funds, and newly launched digital asset financial products provide cryptocurrency exposure with easier yields for institutions without waiting for startup risks.

Historically, cryptocurrency venture funding followed Bitcoin prices. When BTC surged in 2017 and 2021, funding also spiked.

However, that correlation has weakened.

Despite Bitcoin prices strongly rebounding since early 2023, venture activity hasn't kept pace, suggesting market dynamics are changing.

Nevertheless, pro-cryptocurrency signals from Washington, stablecoin rules, and market reforms could encourage more traditional finance (TradFi) players to participate.

If macroeconomic conditions stabilize and regulatory clarity improves, the current downturn could set the stage for a new wave of growth.

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