Crypto Projects’ Market Caps Plunge Below VC Valuations Amid Market Downturn

Fundraising Digest, CryptoRanks venture deals tracker, emphasized this dynamic, stating, “During bull runs and narrative hype, VCs tend to overprice projects and assign aggressive valuations. However, once sentiment fades or the narrative loses traction, most projects get a reality check and the market resets those euphoric numbers.” This expert perspective, rooted in ongoing market analysis, demonstrates the importance of balanced risk assessment in crypto investments. Investors are advised to evaluate projects across multiple scenarios to mitigate such exposures.

The broader crypto ecosystem has felt these pressures acutely. Venture capital funding in the sector remained weak throughout November 2025, with only 57 disclosed rounds, as reported by industry trackers. While standout deals, such as Revolut‘s $1 billion round and Kraken’s $800 million raise in preparation for its initial public offering, provided some uplift, they have overshadowed subdued activity in early- and mid-stage ventures. This slowdown extends a trend from late 2025, where total capital raised has been propped up by a few large transactions but fails to reflect robust overall health.

Authoritative sources like CryptoRank and Fundraising Digest provide critical data for understanding these shifts, emphasizing the need for prudent investment strategies. Experts in the field, including analysts from these platforms, stress that the crypto markets maturity requires separating hype from viable long-term value. For instance, the recent downturn has not only reset valuations but also prompted a reevaluation of project fundamentals, such as technological viability and user adoption metrics.

In addition to these examples, the trend affects a wide array of decentralized finance (DeFi) and infrastructure projects. Blockchain startups that rode the wave of previous bull markets, often fueled by speculative narratives around scalability or interoperability, now face scrutiny under current conditions. This reset serves as a sobering reminder of the crypto sectors inherent volatility, where private valuations can inflate rapidly but public markets demand concrete performance.