Venture Capital Deals Dip Sharply in May

According to data from RootData, only 62 funding rounds were recorded in May—matching levels last seen in early 2021. It’s a stark indicator of how cautious investors have become in a shifting macro and crypto landscape.

Still, these limited rounds managed to bring in $909 million, making May the second-highest month for funds raised this year, trailing only behind March’s $2.89 billion across 78 deals.

Market Sentiment and Global Headwinds Take a Toll

Several industry experts point to a combination of factors behind the decline. After peaking in late January, both market sentiment and prices saw only a modest recovery in April. By late May, tensions around tariffs and ongoing economic uncertainty further dragged on risk appetite.

Persistent high interest rates, volatile bond markets, and growing geopolitical risks have also made it harder for new deals to cross the finish line. Much of the activity observed is now focused on consolidation, which tends to dominate during sideways markets.

Bitcoin Still in the Spotlight

While most crypto assets have underperformed, Bitcoin continues to stand out. It remains a rare bright spot in an otherwise sluggish environment, drawing consistent attention from institutional players and long-term holders alike.

M&A Activity Holds Firm

Even though VC deals slowed down, mergers and acquisitions (M&A) stayed strong. On May 8, Coinbase announced a $2.9 billion acquisition of derivatives exchange Deribit—a transaction that set a new record as the largest crypto M&A deal to date.

Experts suggest that as regulatory clarity improves, large-scale players are opting for direct acquisitions and strategic partnerships rather than relying on VC pipelines. This trend could shift capital flows toward more structured deal-making in the near term.

Seasonal Slowdown or Structural Shift?

According to RedStone’s co-founder Marcin Kazmierczak, the current lull might reflect typical seasonal patterns. May and June are often quiet months in venture markets. However, history shows that activity tends to rebound in early Q4, as investors return from summer and look to close high-value deals before year-end.

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