In the month of May, two separate and distinct markets told contrasting stories for the crypto industry. Activity with venture capital slowed and sank to the weakest level we have seen for the year so far. But the market for mergers and acquisitions did the exact opposite, surging to new heights, driven by a blockbuster deal that sent shockwaves through our sector. Data from the industry indicates that crypto fundraising in May 2025 tallied just about $600 million, making for the year’s lowest monthly total to date. And the total number of funding deals dropped to lows we haven’t seen since early 2021. To me, these two trends signal something pretty clear: investors are just not that into crypto right now. And sentiment seems to be driving these funding figures. Even as venture capital quieted, strategic consolidation began to escalate. In May, M&A activity in the crypto world soared to a new high, with total disclosed deal value just shy of $3 billion. And a significant part of that was Coinbase acquiring Deribit, the largest crypto options exchange, in what you might call a bold move to assert the importance of derivatives trading in the overall digital asset landscape. VC Pullback Signals Investor Caution in Uncertain Market May’s lethargic fundraising scene is an indication of a larger realignment in the crypto venture world. Only $600 million has flowed into the industry’s coffers this past month. And while this was the only month in 2025 with such a low figure, it is even more disconcerting when you consider the STOP THE FLIGHT element of what took place in May. Even when examined through the prism of deal volume, the decline looks harsh. The actual number of funding rounds carried out in May plummeted to a level not observed since the 2021 bull run’s earliest days. This points not only to a deceleration in the raising of large, attention-getting sums but also to a more general, early-stage financing and seed deal cooling that has gone on for a few months now. Interestingly, although the total amount of capital raised decreased, crypto applications focused on finance and artificial intelligence largely made up the value that was raised. Projects relating to financial infrastructure accounted for 39% of all fundraising, indicating that, despite the overall slowdown, the core building blocks of the crypto economy still have investor interest. Meanwhile, solutions that involved artificial intelligence in some capacity captured 25% of the total, underscoring how decentralized technologies and AI are increasingly converging—an intersection that seems to be shaping investment theses across the tech sector. Crypto monthly fundraising slowed to a 2025 low in May, coming in right around $600M. Financial (39%) and AI (25%) applications drove most of the value raised The total number of deals hit a low not seen since early 2021 pic.twitter.com/a19T4Nvu2i — Dan Smith (@smyyguy) June 1, 2025 Blockbuster Coinbase-Deribit Deal Drives M&A Surge Despite a slowdown in venture market activity, a surge in mergers and acquisition (M&A) activity took place during May 2023. The total disclosed value of crypto M&A activity in May 2023 was just shy of $3 billion, which was not only a record amount for the month but also the largest single-month tally since Messari began tracking crypto M&A data in 2020. Central to this history-creating month was the buyout of Deribit by Coinbase. While the exact terms of the deal didn’t make it to the public’s ear, the acquisition was believed to form a large chunk of May’s almost $3B worth of M&A activity. This telling move sees the crypto-exchange giant dive deeper into the lucrative op-ex market. Meanwhile, with Deribit commanding a decent share of crypto trading options globally (as in mammoth contract size), this positions Coinbase to better serve its institutional clients and compete against its unregulated offshore rivals. It is important to mention, however, that the majority of crypto-related M&A deals do not make their financial terms public. This leaves the actual scale of the activity something of a mystery—but perhaps a more impressive one than the numbers suggest. It’s also worth pointing out that the sheer number of deals struck in May was one of the lowest monthly levels we’ve seen this year. An Industry in Transition: Fewer Bets, Bigger Moves May’s figures, when viewed together, show the industry at a crossroads. Venture capitalists have stepped back, putting their money into fewer, more thoughtfully chosen investments that are less likely to run afoul of regulators or the current slack macroeconomic conditions. At the same time, the big players in the digital space, the ones with actual cash to spend, are using this market dip to acquire the kinds of infrastructure and talent that will keep them ahead of the game. This change toward consolidation and particular investment might in the end bring about a more robust crypto sector. In the immediate future, though, it means less in the way of cash and support for startups and a more cutthroat environment for almost all projects trying to establish themselves in the crypto market. When 2025 unfolds, all eyes will be on whether VC funding continues to be on the downside and whether M&A will remain the alleged main story in a slowly maturing digital asset industry. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news ! 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