Crypto venture capital winter! November trading volume drops to yearly low, with only 57 major financing deals supporting the market

In November, the cryptocurrency venture capital market continued its sluggish trend. RootData statistics show that only 57 funding rounds were disclosed during the month, one of the lowest records this year. However, the total amount of financing remained relatively stable due to large transactions such as Revolut’s $1 billion and CEX’s $800 million, highlighting the polarized phenomenon of “large sums, few deals” in the crypto venture capital market.

Structural Shift in the Crypto Venture Capital Market

(Source: Galaxy Research)

The crypto venture capital market is undergoing a profound structural transformation. Unlike the bull market of 2021, when hundreds of small seed and angel rounds flourished, current market capital is highly concentrated in a few major rounds by mature companies. This shift is no accident; it reflects a fundamental change in investor risk appetite. After experiencing major collapses such as Luna and FTX, VC firms have become extremely cautious, preferring to invest large amounts in mature projects with proven business models rather than take risks on early-stage startups.

RootData shows that only 57 funding rounds were disclosed in November, one of the lowest numbers this year. Even more concerning, this downward trend is not a short-term fluctuation, but a continued slowdown since 2022. Galaxy Digital’s research shows that both venture capital funding and deal activity in crypto remain far below previous bull market levels, even as Bitcoin prices have rebounded above $90,000.

However, the total financing amount remained relatively stable thanks to a few large deals. Revolut’s $1 billion round and CEX’s $800 million pre-IPO raise together accounted for the majority of November’s total financing. This “elephant in the room” situation makes the overall financing figures seem not too bad, but masks the harsh reality of financing difficulties for early-stage projects.

Three Key Characteristics of the Current Crypto VC Market

Capital Concentration at the Top: Mature companies like Revolut and CEX secure billion-dollar financing, while early-stage projects struggle for funding.

Sharp Decline in Deal Numbers: Only 57 funding rounds in November, a yearly low, with a significant reduction in seed and angel deals.

Clear Sector Divergence: Capital mainly flows to verified sectors such as centralized finance, decentralized finance, and NFT-GameFi.

Long-term Risks Behind Shrinking Deal Volume

Sarah Austin, co-founder of real asset gaming platform Titled, pointed out an important view: while the slowdown in deal volume can partly be attributed to overall market conditions, this trend brings long-term risks. She told the media, “Ultimately, this will negatively affect the entire industry because the best deals are often made during tough economic times.”

This view reveals the paradox currently facing the crypto VC market. Historical experience shows that the most successful investments often occur during market downturns. Tech giants like Amazon, Google, and Facebook all secured key funding during the trough after the dot-com bubble burst. Similarly, CEX unicorns laid their foundations in the previous bear market.

The current shrinking deal volume means many promising early-stage projects are unable to secure funding, even though some may contain the next revolutionary innovation. If VC money continues to concentrate on mature companies, the industry’s innovation momentum will be stifled. Worse, this trend could solidify the competitive landscape, strengthen existing giants’ monopolies, and make it harder for new entrants to challenge them.

Moreover, the shrinking deal volume reflects an unhealthy state in the crypto VC ecosystem. A healthy VC ecosystem should have a pyramid structure: many angel and seed projects at the base, growth-stage projects in the middle, and a few mature companies at the top. Currently, the structure is inverted, with a severely shrunken base and over-concentration of resources at the top. This imbalance is unsustainable in the long run.

Analysis of Top Financing Cases: Breakout Players in Three Sectors

Despite the overall low deal volume, some projects still managed to secure funding in November. According to RootData, most deals were concentrated in centralized finance, decentralized finance, and NFT-GameFi. The following three cases represent financing trends in different sectors.

Ostium raised $24 million in funding and plans to expand its on-chain perpetual contracts protocol to non-crypto markets such as stocks, commodities, indices, and currencies. Founded by former Harvard classmates, this decentralized perpetual contract platform received support from notable investors like General Catalyst, Jump Crypto, Susquehanna International Group, as well as angel investments from traditional financial institutions such as Bridgewater, Two Sigma, and Brevan Howard.

Ostium’s successful fundraising shows that investors remain interested in projects that connect traditional finance with crypto. The company’s broader strategic goal is to position Ostium as the leading perpetuals protocol for real world assets and to expand channels for entering traditional markets through self-custody infrastructure. The funds will be used to strengthen its core systems, including smart contracts, pricing infrastructure, and liquidity engines, to support higher trading volumes.

On-chain yield protocol Axis completed a $5 million private round led by Galaxy Ventures, as it prepares to launch a yield protocol offering on-chain exposure to Bitcoin, gold, and the US dollar. Other investors include Maven 11 Capital, CMS Holdings, and FalconX. Axis stated the funds will be used to develop its so-called transparent on-chain digital asset yield infrastructure, and it has already deployed $100 million in private capital from investors via its test platform.

Texas-based startup PoobahAI completed a $2 million seed round led by FourTwoAlpha, a VC known for early investments in Ethereum and Cosmos. PoobahAI aims to help users create tokenized Web3 networks and AI agents without writing code. The emerging AI-Web3 ecosystem combines artificial intelligence with decentralized infrastructure, seen as a way to create more autonomous, user-controlled digital systems.

Crypto Venture Capital Outlook for 2025

The current slump is expected to last until the end of 2025, posing both challenges and opportunities for the entire crypto ecosystem. On the challenge side, difficult fundraising for early-stage projects could slow innovation, leaving many promising ideas unrealized. On the opportunity side, this environment will weed out speculative projects and allow truly valuable innovations to stand out.

For entrepreneurs, the current environment sets a higher bar. The days when a whitepaper or concept could secure funding are gone; investors now demand actual products, user growth, and revenue models. While this shift is harsh, it benefits the industry’s healthy development in the long run.

For investors, now is the best time to position for the next bull market. History has proven that returns on bear market investments are often much higher than those made during bull markets. However, most VC firms are choosing to wait and see, which might cause them to miss the best investment opportunities.