Crypto Market Sees 85% of 2025 Tokens Below Launch, VC Funding Slumps

Key Insights

• A crypto market report shows that 85% of 2025 tokens are trading below their launch prices as VC-backed projects fail.
• VC fundraising collapsed from a $17 billion Q2 2022 peak to a five-year low at 12% of that level.
• VCs deployed $8.5 billion last quarter, up 84%, using old 2022 capital on infrastructure and RWA.

Crypto market headlines screamed ‘disaster’ on Feb. 17. A report from The DeFi Edge revealed that 85% of tokens issued in 2025 are trading below their launch prices. VC fundraising collapsed to a five-year low. New fund formation hit rock bottom.

But beneath the wreckage, VCs deployed $8.5 billion last quarter, up 84% from the previous quarter. The money did not disappear. It shifted to infrastructure, real-world assets, and onchain finance.

Token Launches Failed While VC Fundraising Collapsed

The DeFi Edge data shows 85% of tokens launched in 2025 currently trade below their initial offering price. VC-backed projects perform even worse, with some described as deeply unprofitable. AI narrative plays dominated new issuances throughout 2025.

Teams raised millions, then dumped tokens on retail buyers at launch. Community reactions were brutal, with many sarcastically asking, “Only 85%?” suggesting they expected worse.

Q2 2022 marked the peak for venture capital in crypto when VCs raised nearly $17 billion across more than 80 new funds in that single quarter.

Fast forward to late 2025, and new fund formation collapsed to a five-year low. Last quarter’s fundraising represented only 12% of Q2 2022 levels. Limited partners stopped committing fresh capital after watching portfolio companies implode, and token launches fail spectacularly.

Industry insiders describe the current environment as a mass extinction event for crypto venture funds. Smaller funds with poor track records cannot raise.  Mid-tier funds struggle to close even scaled-down targets. The crypto market shift forced venture capitalists into survival mode rather than growth mode.

VCs Deploy $8.5 Billion Using Old 2022 Capital

Despite the fundraising collapse, VCs deployed $8.5 billion into the crypto market last quarter, a 84% quarter-over-quarter increase. Most of the $8.5 billion came from funds raised in 2021 and 2022, during the bull-market peak. Limited partnership agreements require fund managers to put money to work within specific timeframes, even in tough market conditions.

The deployment pattern shows venture capitalists finally putting 2022-era money to work after sitting on the sidelines through 2023 and much of 2024. Infrastructure received the bulk of new venture capital. Layer-zero solutions for cross-chain compatibility attracted significant checks. Projects building fundamental blockchain rails rather than speculative tokens found willing investors.

Real-world asset tokenization was a major theme. Dragonfly Capital closed a $650 million fund dedicated specifically to RWA and onchain finance despite the tough fundraising environment. Stablecoin infrastructure development attracted substantial capital, including investment in payment rails, compliance tools, and liquidity solutions. Prediction markets gained traction after regulatory clarity improved with the CFTC providing frameworks.

Institutional Crypto Market Accumulation Continues Despite Fear

MicroStrategy added 2,486 Bitcoin during recent crypto market weakness at approximately $168 million with an average Bitcoin price of $67,710. Total holdings now stand at 717,131 Bitcoin, with an average acquisition cost of $76,027. The corporate treasury strategy continues accumulating regardless of short-term price action.

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