Only 150 unique venture capital firms participated in crypto funding rounds in July, the lowest monthly total since November 2020, according to CryptoRank data through July 28.
Investor participation has fallen sharply from the last bull-market peak
The latest figure shows how much the crypto funding base has narrowed since the previous market cycle. In May 2022, at the peak, 1,177 investors backed crypto rounds in a single month. That puts the decline in participation at 87%.
According to the report, smaller funds, family offices, and angel syndicates that flooded into rounds during 2021 and 2022 have largely stepped away. In their place, a more concentrated group of established firms is leading deals.
Quarterly data tells the same story
The broader trend looks similar on a quarterly basis. CryptoRank data shows that 651 firms participated in crypto rounds in the second quarter, down about 75% from 2,564 in the second quarter of 2022.
Fewer firms does not automatically mean less capital
A smaller active investor pool does not necessarily translate into less money flowing into the sector. Large firms are still backing infrastructure projects and real-world asset plays. Dragonfly, for example, closed a $650 million fourth fund in February.
At the time, Dragonfly managing partner Haseeb Qureshi told Fortune that blockchain venture capital was facing a “mass extinction.” He has also argued that dedicated crypto venture capital could lose its reason to exist by 2030 if dominant platforms keep capturing users and liquidity, leaving few important companies left to fund.
July remains partial data, but the gap from 2022 is hard to ignore
One month of partial data still leaves room for seasonal distortion, and summer is typically a slower period for venture activity. Even so, the distance from the 2022 peak makes it difficult to dismiss the latest reading as a short-term blip.
The question now is whether a recovery in token markets or clearer U.S. legislation could bring smaller long-tail funds back into the market, or whether crypto venture has already consolidated into an insider-heavy arena where the same firms set the price for nearly every round.