AI Funding Surges Past Crypto—But Does It Really Signal a Shift?
Despite a strong year-end rally for crypto in 2024, artificial intelligence (AI) continues to dominate venture capital (VC) funding in 2025. But is this truly an investor preference for AI over crypto, or just a reflection of broader market trends?
According to Pitchbook data, crypto startups in the U.S. raised $861 million in the first quarter of 2025, a respectable figure—but nowhere close to AI’s massive $20 billion haul.
AI startups closed 795 deals in Q1, led by Databricks’ $15.3 billion raise and Anthropic’s $2 billion investment round. Meanwhile, crypto’s largest deal came from Abu Dhabi’s MGX investing $2 billion into Binance—marking a rare instance of institutional capital flowing into a major crypto player. Other notable crypto deals included Mesh’s $82 million, Bitwise’s $70 million, and Sygnum Bank’s $58 million.
A Broader Look: AI’s Historic VC Advantage
The AI vs. crypto funding gap isn’t new. In 2024, AI startups attracted $131.5 billion in VC investments globally, accounting for one-third of all venture funding. Meanwhile, crypto companies secured just $4.9 billion across 706 deals—a stark contrast that has existed for years.
Historically, AI has consistently led in funding. Statista data shows that AI investment grew from $670 million in 2011 to $36 billion in 2020, with continued momentum. The only time crypto surpassed AI in funding was in 2021, when VCs poured $30 billion into crypto compared to AI’s $22.3 billion, per ABI Research.
Is Crypto Really Losing? Not So Fast.
While AI’s VC dominance might suggest crypto is struggling, the reality is more nuanced. Crypto has a completely different funding model that doesn’t rely on traditional venture capital in the same way AI does.
For example, a Dragonfly report found that between 2020 and 2024, the 11 largest crypto airdrops collectively distributed $7 billion—a unique fundraising method that AI startups lack.
Additionally, crypto’s decentralized nature allows projects to raise capital through token sales, staking incentives, and decentralized autonomous organizations (DAOs) rather than relying solely on institutional investors.
The Bigger Picture: Different Markets, Different Needs
AI companies require heavy upfront investment in infrastructure, data processing, and computational power—costs that demand large VC rounds. Crypto projects, on the other hand, often bootstrap their growth through community-driven funding models, making direct comparisons with AI somewhat misleading.
So while AI’s $20 billion Q1 funding spree might suggest investors are favoring one sector over the other, the truth is more complex. Rather than seeing this as a loss for crypto, it’s more accurate to view it as two vastly different industries playing by different rules.
