Crypto VC Funding Falls to Two-Year Low; Tokenized RWAs Rise 420%

Crypto venture capital funding fell to $659 million in April across 63 funding rounds, reaching a near two-year low. At the same time, the market for tokenized real-world assets (RWAs) expanded to about $30.2 billion, a rise of more than 420% since Jan. 1, 2025.

April’s total represented a 74% decline from March, when crypto startups raised $2.6 billion across 84 rounds. Year-to-date investment in 2026 stands at $5.64 billion. The April figure was the smallest monthly sum since July 2024, when projects raised $622 million across 132 rounds. Monthly VC funding has trended downward since October 2025, when ventures collected $3.84 billion over 127 rounds; market data show the global crypto market capitalization has contracted by roughly 37% since then.

Deal activity in April was led by decentralized finance protocols, which accounted for 12 funding rounds. Blockchain services and projects tied to artificial intelligence each logged eight rounds. Market trackers report investors are more selective, citing weaker liquidity and reduced risk appetite as factors behind the slowdown in early-stage and startup financing.

The tokenized RWA market rose from about $5.8 billion on Jan. 1, 2025 to roughly $30.2 billion. Tokenized U.S. Treasurys were the largest contributor, increasing from about $3.9 billion to more than $15 billion. Tokenized commodities accounted for the next-largest share of growth.

Analysts point to demand from institutional investors for regulated, on-chain exposure to traditional yields and easier market access as drivers of the RWA increase. Dominick John, an analyst at Zeus Research, described tokenized Treasurys as “compliant on-chain access to real-world yield” that can turn blockchain infrastructure into a distribution layer for institutional capital.

Regulatory frameworks such as the Markets in Crypto-Assets Regulation in Europe have reduced legal uncertainty, according to industry reports, and have helped draw institutional participants and new capital into tokenized assets.

Behavior among retail users is also shifting in some regions. A 2025 report from a Latin American exchange found U.S. dollar-linked stablecoins made up 40% of crypto purchases that year, while Bitcoin accounted for 18%. The exchange based the findings on activity from nearly 10 million retail users and said stablecoins are increasingly used to store value and transact in dollar equivalents in countries facing inflation, currency depreciation and limited access to banking services.