Crypto VC Funding Rebounds 14% in February but Still Lags Behind Last Year

Crypto venture capital saw a surge in February, with investments climbing 14.4% from the previous month. However, compared to last year, funding remained 35.1% lower, reflecting the industry’s shifting dynamics. Stablecoin projects and Bitcoin-focused ventures led the way, while private credit liquidity and modular blockchain technologies gained momentum.

Stablecoins and Payment Innovations Dominate Investments

Stablecoins were at the center of February’s crypto funding wave. The biggest highlight was Raise, a gift card startup, securing $63 million to integrate crypto payments into its platform. This move signals a broader push toward stablecoins as a mainstream payment method.

Another major winner was Plasma, which locked in $24 million in its first funding round. The project, backed by Framework Ventures and Tether CEO Paolo Ardoino, aims to facilitate zero-fee Tether (USDT) transactions. While the absence of transaction fees might raise eyebrows, Plasma plans to generate revenue by integrating with DeFi protocols like Curve, Ethena, and Aave.

Meanwhile, Ethena, which had previously raised $100 million in December, continued to make waves. With backing from Franklin Templeton and F-Prime Capital, Ethena is working on tokenized financial instruments that bridge traditional finance and crypto.

Bitcoin Projects Gain Traction with Smart Contract Upgrades

Bitcoin-focused ventures saw a fresh influx of funding in February, signaling growing interest in enhancing the blockchain’s capabilities.

• Taproot Wizards, a project expanding Bitcoin’s smart contract potential, secured $30 million in funding.
• The funding aims to push OP_CAT, an upgrade that could unlock new Bitcoin functionalities, including programmable transactions.

Bitcoin’s layer-2 ecosystem continues to evolve, with investors looking beyond traditional use cases. As the network faces scalability challenges, these projects could redefine how Bitcoin operates in the broader blockchain landscape.

Biggest Deal of the Month: $200M for Private Credit Liquidity

The largest funding round in February belonged to Figure & Sixth Street, who poured $200 million into private credit liquidity. This signals an increasing interest in tokenizing real-world assets (RWAs), a trend that has gained traction among institutional investors.

Bitwise, a leading crypto asset manager, also secured $70 million, further strengthening its investment strategies. Meanwhile, Blockaid, an Israeli blockchain security firm, locked in $50 million in a Series B round, reinforcing its role in cybersecurity.

February 2025 vs. February 2024: A Mixed Bag

While the month-over-month growth was impressive, the yearly comparison tells a different story.

• In February 2025, total crypto VC funding hit $951 million, an increase from $831 million in January.
• However, the number of deals fell significantly, dropping from 151 in February 2024 to 98 in February 2025.

The data highlights a clear trend: investors are becoming more selective, focusing on projects with strong use cases and institutional appeal rather than spreading capital across multiple startups.

AI and Modular Blockchains Gain Investor Attention

Beyond stablecoins and Bitcoin projects, artificial intelligence (AI) and modular blockchain technologies saw a growing share of VC interest.

• AI-driven projects are increasingly merging with blockchain to improve security, data verification, and efficiency.
• Modular blockchain frameworks, which separate execution, consensus, and data storage, are gaining favor over traditional monolithic blockchains due to scalability advantages.

These emerging trends suggest that crypto VC investment is shifting towards infrastructure and institutional-grade solutions rather than speculative projects.