VC Monthly Report Highlights Shift from Small Fundraising to Major M&A as Coinbase Acquires Deribit in $2.9B Deal

Wu Blockchain shared the VC monthly report via the X platform on June 3. The report highlights the shift from small fundraising to major M&A. Along with this change, crypto in May 2025 witnessed a turning point as Coinbase acquired Deribit in a $2.9 billion deal. The deal signals a shift from early-stage fundraising to consolidation and large-scale acquisitions. Alongside this record-breaking M&A, the report highlighted a steady decline in smaller VC deals. This tightens the capital flow for startups and a maturing investment landscape across the digital asset ecosystem.

VC Monthly Report: Fundraising Momentum Slows, Large M&A Deals Dominate

The VC monthly report revealed only 62 deals were announced in May 2025, down 6.1% from April’s 66. This marked a steep 61.3% decline compared to the 160 deals in May 2024. While the number of deals dropped, total fundraising volume surged to $3.95 billion, driven largely by the Coinbase-Deribit acquisition. Deribit’s acquisition involved $700 million in cash and 11 million Coinbase shares. The platform controls $30 billion in crypto options open interest and generated up to $450 million in revenue in 2024. Post-announcement, Coinbase stock rose 5.7%, though it remained 21% down year-to-date.

Source: Wu Blockchain Post On X Platform, June 3, 2025.

Sector-wise, DeFi topped deal share at 27.4%, followed by CeFi (12.9%) and Layer 1/Layer 2 platforms (11.3%). Emerging areas like AI and RWA/DePIN each captured over 11%, signaling a shift in investor interest towards scalable infrastructure and real-world integrations.

VC Monthly Report Shows Shrinking Room for Startups

The report signalled a challenging climate for early-stage crypto startups. Seed and Series A funding rounds are shrinking as the deal count drops sharply. Tooling, wallets, and NFT/GameFi sectors received less than 15% of the total deal share combined. SharpLink Gaming’s $425 million PIPE deal and World Assets’ $135 million token sale represented the few high-value investments outside M&A. 

Many smaller projects found it difficult to secure institutional backing amid this market shift. Investors preferred platforms with strong revenue potential or real-world asset exposure. This trend suggests increasing caution among VCs, who now seek safer bets over experimental ventures. As larger firms consolidate, competition for funding among new entrants could intensify in the coming months.

Derivatives Seen as New Growth Frontier in Crypto Finance

Coinbase’s acquisition of Deribit points to a long-term bet on derivatives trading. Deribit’s dominance in options volumes and institutional demand for hedging tools positioned it as a valuable asset. Coinbase, which previously acquired FairX in 2022, now controls nearly 85% of global crypto options markets. This consolidation mirrors patterns seen in traditional finance. The VC monthly report mentioned that large players are improving market efficiency and offering a full suite of services. Regulators are also shifting positively. 

New U.S. legislative milestones expected by August 2025 could pave the way for regulated crypto options trading domestically. Coinbase aims to turn its global derivatives lead into a U.S. leadership position. This expansion comes amid its recent security concerns. A breach involving third-party firm TaskUs raised questions, but Coinbase responded by firing implicated staff and enhancing controls.

VC Monthly Report Says Shift Means for Investors and the Ecosystem

The surge in large M&A deals highlights a critical shift in crypto investment behaviour. Investors are now placing greater confidence in mature, revenue-generating platforms rather than speculative startups. The VC monthly report reflects this by showing fewer, but higher-value deals. Small projects may struggle more with fundraising, while established players benefit from network effects and consolidation. With rising institutional demand and regulatory clarity, larger platforms stand to gain. At the same time, early-stage innovators must show tangible utility and market fit to attract capital. As of May 2025, crypto investments are no longer just about hype, they demand performance, scale, and compliance.

Consolidation Over Speculation in Crypto VC Landscape

The May 2025 VC monthly report highlights a critical moment for the crypto market. Record-breaking acquisitions like Coinbase’s Deribit deal show where capital is flowing into proven infrastructures and regulated markets. Smaller ventures face hurdles unless they offer real-world utility or institutional value. This trend marks the beginning of a consolidation era in crypto finance. Startups must adapt by focusing on compliance, usability, and interoperability. Investors, in turn, will likely continue prioritizing risk-managed, scalable platforms. The months ahead may further separate emerging leaders from speculative players, reshaping the crypto VC landscape for 2025 and beyond.