Although digital assets are witnessing unprecedented interest from institutional investors, traditional banks, and corporations, the pace of venture capital investments in the crypto sector has seen a significant slowdown since the initial quarter of the year. The latest report from Galaxy Research indicates that crypto and blockchain startups managed to secure only $1.97 billion across 378 deals during the second quarter, marking a substantial 59% drop in funding and a 15% decrease in the number of deals compared to the preceding quarter. This figure represents one of the lowest quarterly totals since the fourth quarter of 2020.
### Venture Capital Trends and Bitcoin Correlation
Researchers have noted a breakdown in the long-standing correlation between Bitcoin’s (BTC) value and venture capital investments within the industry, suggesting that the relationship is “struggling to recover.” Galaxy attributes this disconnect to a decline in interest from venture capitalists, alongside evolving market narratives that increasingly emphasize Bitcoin accumulation rather than diversified investment strategies.
### Shift in Investment Preferences
Crypto-centric venture capital has yet to regain its peak levels from 2021. Meanwhile, data from Insights4VC indicates a notable shift in investment patterns. Digital asset treasury companies—entities primarily focused on raising funds to acquire cryptocurrencies—have garnered the majority of investments this year, amassing $15 billion by August 21 to enhance their holdings of Bitcoin, Ether (ETH), and other tokens. This trend highlights a divergence between treasuries that are accumulating cryptocurrencies and startups seeking venture capital, reflecting a shift in investor expectations. According to Hunter Horsley, CEO of Bitwise, more investors are demanding clearer paths to revenue and sustainable business models.
### Noteworthy Funding Rounds in the Sector
In light of these developments, the latest VC Roundup delves into some of the most significant funding rounds in areas such as on-chain finance, real-world assets (RWAs), and stablecoin infrastructure.
### Mavryk Secures $10 Million for RWA Tokenization
Layer-1 blockchain Mavryk Network has successfully raised $10 million in a funding round led by Multibank Group, aimed at enhancing institutional access to tokenized RWAs. This investment is part of a larger collaboration between Mavryk and Multibank, targeting the tokenization of over $10 billion worth of properties in the United Arab Emirates, one of the most ambitious RWA tokenization projects globally. This latest funding follows a $5 million raise earlier in the year, backed by notable investors including Ghaf Capital and MetaVest Capital.
### Grvt Completes $19 Million Series A Round
Grvt, a hybrid cryptocurrency exchange focused on privacy-preserving on-chain finance, has successfully completed a $19 million Series A funding round, co-led by ZKsync and Further Ventures. Leveraging ZKsync technology, Grvt aims to develop privacy-centric infrastructure for on-chain trading and investment. The funds will be utilized to expand its product offerings, which include cross-chain applications, options markets, and RWAs. Recently, Grvt has witnessed an uptick in trading activity, processing over $922 million in perpetual futures volume in just 24 hours, according to DefiLlama.
### Stablecore Raises $20 Million for Stablecoin Adoption
Stablecore, a platform dedicated to stablecoin infrastructure for credit unions and regional banks, has secured $20 million in a seed funding round led by Norwest, with contributions from Coinbase Ventures and other investors. The company is working on a “digital asset core” platform designed to streamline the integration of various cryptocurrency services, making it easier for smaller financial institutions to accept and manage stablecoins. Stablecore highlighted the recent passage of the US GENIUS Act as a pivotal development that could accelerate stablecoin adoption in traditional finance. This funding round comes at a time when the total market capitalization for stablecoins has exceeded $300 billion, reflecting a growing interest in the sector.
### Plural Raises Over $7 Million for Energy Asset Tokenization
Plural, a financial infrastructure platform connecting real-world energy assets with digital markets, has raised $7.13 million in a seed funding round led by Paradigm, with support from Maven11 and Volt Capital. The company utilizes tokenization and smart contracts to provide investors access to lucrative energy assets, including solar farms and battery storage systems. With over $300 million in distributed solar and battery assets currently available for investment on its platform, the funding arrives as global electricity demand from data centers rises, fueled by the growth of AI and cloud infrastructure, creating an urgent need for renewable energy solutions beyond conventional power grids.
