Crypto Investment Slows, August Funding Sinks To $2 Billion

After a summer marked by cautious investor sentiment and shifting priorities across the sector, new figures show that capital flows into crypto are starting to cool.

Overall funding for crypto protocols was down 30% in August, sliding to nearly $2 billion from July’s $2.67 billion, according to DeFiLlama.

Funding Dips Yet Quarter Gains

Based on reports, third-quarter totals reached $4.57 billion in just two months, pushing past Q2’s $4.54 billion. That shows money is still moving, even if monthly flows look cooler compared with past peaks.

At the start of 2022, monthly raises hit about $7 billion. Numbers have come down since then, but 2025 has shown several big spikes that kept investors alert.

Investor Focus Shifts To Existing Projects

According to market analyst Daan Crypto Trades, funding has moved away from nonstop new-chain launches toward treasuries and teams building on existing projects.

He points out that new launches are hitting lower valuations, which has helped keep price moves quieter after listings.

The Total Funding Raised for new Crypto projects has seen an increase the past few months but is nowhere close to what it was back in 2021 & 2022.

This cycle has been all about treasury companies which are building on top of projects that are already out there.

Most capital… pic.twitter.com/nqo25QxVUo

— Daan Crypto Trades (@DaanCrypto) September 11, 2025

Investments Spread Beyond DeFi

DeFi still drew attention in August, with money flowing into infrastructure and trading platforms. But other sectors also saw notable rounds.

Stablecoin infrastructure was busy too, with Rain’s raise at $58 million. Payment solutions also attracted funding; OrangeX took $20 million in a Series B.

South Korea Opens VC Doors

Following approval by the State Council and cabinet, South Korea’s Ministry of SMEs and Startups said it lifted a long-standing VC funding ban on September 16.

The amendment to the Enforcement Decree removes the label that had kept exchanges and brokerages classified as “restricted venture businesses” since October 2018.

Recent laws, including the Virtual Asset User Protection Act passed in July 2025, introduced deposit safeguards, record-keeping rules, and bans on unfair trading. Those steps helped convince regulators to reopen the market.

Government Support Could Boost Local Firms

The decision to lift South Korea’s long-standing restrictions on crypto funding came with a clear message from policymakers.

Officials said the move aims to create a more transparent and responsible ecosystem, and to help venture capital flow to companies focused on blockchain and cryptography.

If VCs return, local crypto firms may find new sources of growth capital, while investors look for projects that can deliver longer-term value.

Featured image from Unsplash, chart from TradingView