Crypto Assets DAT craze impacts traditional financing, new startups face funding constraints

Recently, the financing landscape of the Crypto Assets market is undergoing profound changes. Digital Asset Trading (DAT) has rapidly risen, attracting most of the capital and follow, while the financing rounds and amounts of traditional Crypto Assets startups have significantly declined. Venture capitalists are concerned that this wave of DAT may be squeezing the survival space of early-stage startup teams and changing the investment standards of Crypto Assets venture capital.

DAT dominates the market, traditional financing cools down

According to The Block Pro data, as of 2025, there were only 856 venture capital rounds for cryptocurrency startups excluding DAT and token sales, a decline of 56% compared to 1,933 rounds during the same period last year.

The total financing amount decreased from 8.13 billion USD in the same period of 2024 to 8.05 billion USD, which includes a single financing of 2 billion USD. Excluding DAT, the traditional venture capital financing amount is only 6.05 billion USD, a year-on-year decrease of about 26%.

Venture capitalists point out that DAT can attract capital because it offers real-time market prices, faster liquidity, and can raise more funds to purchase Crypto Assets when the trading price is above mNAV (net asset value per share of Crypto Assets), driving the growth flywheel.

Investment standards shift towards fundamentals and income

The aesthetics of the capital market are changing. Investors prefer agreements that can generate income and have clear value capture mechanisms, rather than projects driven solely by narratives.

Neoclassic Capital co-founder Michael Bucella and Ed Roman of Hack VC both stated that projects like Hyperliquid, which return income to token holders, have become the new standard.

Cosmo Jiang from Pantera Capital stated that the capital losses caused by "worthless tokens" in the past were a healthy market reset, forcing venture capital to abandon the model of "first the coin, then the product."

Early financing is suppressed by multiple factors

In addition to the capital-raising effect of DAT, early financing was also influenced by macro markets and capital structures.

Since 2021, the fundraising difficulty for small crypto funds has significantly increased, and limited partners' interest in supporting small venture capital has cooled, leading to a decrease in funding sources for early-stage projects.

A round of financing tightening is partly due to the limited number of companies available for investment and the conservative attitude of exchanges towards token listings, similar to the capital exhaustion phenomenon after the IPO window closed in the Web2 era.

Funds are still looking for high-quality opportunities

Despite the tightening funding environment, some areas remain attractive.

DePIN (Decentralized Physical Infrastructure Network): Seen as a long-term potential track, but quality projects are scarce.

DeFi Protocols: Protocols with mature profit models that still hold investment value even during valuation downturns.

Zero-Knowledge Technology: The application of bringing off-chain data on-chain is receiving significant attention.

Inverse Investment Areas: On-chain intellectual property, capital markets, gaming, and emerging markets such as decentralized social media.

Encryption and AI Integration: Considered by some investors to still be an underestimated blue ocean.

Conclusion

The rise of the Crypto Assets DAT is reshaping the flow of venture capital and investment standards. Although they have brought liquidity and follow in the market in the short term, competition for funding is becoming increasingly fierce for traditional startups. In the future, the ability to stand out in terms of fundamentals, revenue models, and innovative applications will determine whether startup teams can survive and grow in this capital restructuring.