VC Investment in AI Outpaced Crypto in Q1’25, Raising Questions About Industry Priorities

AI Secures Nearly 20x More VC Funding Than Crypto in Q1 2025—But Is It a Fair Comparison?

Despite crypto’s late-2024 rally fueled by the so-called “Trump bump,” venture capitalists are still overwhelmingly favoring artificial intelligence over blockchain investments. But is this shift in funding a sign of long-term preference or just part of a natural market cycle?

In the first quarter of 2025, U.S. crypto startups raised approximately $861 million, a respectable figure—but one that pales in comparison to the $20 billion funneled into AI ventures, according to Pitchbook data.

From January to March, investors backed 795 AI-related deals, with standout rounds such as Databricks’ massive $15.3 billion raise and Anthropic’s $2 billion funding round drawing widespread attention.

By contrast, crypto’s largest funding round came from Abu Dhabi’s MGX, which invested $2 billion into Binance—the first major institutional stake in the exchange. Other significant crypto deals included Mesh’s $82 million raise, Bitwise’s $70 million investment, and Sygnum Bank’s $58 million round.

AI vs. Crypto: A Long-Standing Funding Gap

AI’s dominance in venture capital isn’t a sudden development. In 2024, AI startups received $131.5 billion globally, accounting for one-third of all VC investments. Crypto, by comparison, secured $4.9 billion across 706 deals in the same period.

Historically, AI has consistently attracted larger funding rounds. Data from Statista shows AI investment rising from $670 million in 2011 to $36 billion in 2020. The only year where crypto outpaced AI in VC funding was 2021, when blockchain startups raised $30 billion, compared to AI’s $22.3 billion, per ABI Research.

Why Crypto Funding Works Differently

While AI appears to have a clear funding lead, crypto operates under a different financial model. Beyond venture capital, crypto projects often rely on airdrops, token incentives, and decentralized funding mechanisms.

A recent Dragonfly report revealed that between 2020 and 2024, the 11 largest airdrops distributed over $7 billion to users, injecting capital directly into crypto ecosystems. Unlike AI, where funding primarily comes from traditional VC firms, crypto projects have alternative ways to grow and sustain themselves.

The Bottom Line

AI’s venture capital dominance isn’t necessarily a sign that crypto is losing relevance—it simply reflects different funding dynamics. While AI attracts more institutional capital, crypto continues to evolve through decentralized finance, token economies, and alternative funding methods.

So, rather than AI “beating” crypto, the two industries are operating on separate financial playing fields.