Crypto downturn reveals gap between VC valuations and market cap

cointelegraphОпубликовано 2025-12-24Обновлено 2025-12-24

Введение

The crypto market downturn has exposed a significant gap between venture capital valuations and actual market capitalizations for numerous blockchain startups. Data from CryptoRank reveals that projects once valued near $1 billion, such as Humanity Protocol ($285M market cap), Fuel Network ($11M), and Bubblemaps ($6M), have seen drastic devaluations. This trend reflects how aggressive VC pricing during bull markets often leads to severe corrections when sentiment fades. The reset affects even lower-valued projects, with examples like Camp Network and Treehouse now trading at just $15M and $16M despite previous $400M valuations. The report advises investors to maintain caution and assess risks carefully. Meanwhile, crypto VC funding remains weak, with only 57 disclosed rounds in November, despite a few large raises like Revolut's $1 billion round.

Several blockchain startups once valued near $1 billion now have market capitalizations that are only a fraction of those figures, as tighter liquidity forces valuation resets.

This is evident across several high profile projects, according to data compiled by CryptoRank.

Humanity Protocol, which carried a venture valuation of around $1 billion, now has a market capitalization of about $285 million. Fuel Network, also previously valued near $1 billion, is trading closer to $11 million, while Bubblemaps, once assigned a similar venture capital (VC) valuation, has a market cap of about $6 million.

“During bull runs and narrative hype, VCs tend to overprice projects and assign aggressive valuations,” Fundraising Digest, CryptoRank’s venture deals tracker, wrote on X. “However, once sentiment fades or the narrative loses traction, most projects get a reality check and the market resets those euphoric numbers.”

The recent crypto market downturn has exposed gaps between venture capital valuations and public market pricing, revealing how aggressively projects were priced during the last bull cycle.

Related: HashKey secures $250M for new crypto fund amid ‘significant interest’

More crypto projects see sharp reset from VC valuations

The gap continues with projects with relatively lower valuations.

Plasma, which was valued at about $500 million by venture investors now trades around $224 million. ICNT fell from a $470 million VC valuation to a market cap near $247 million. DoubleZero, valued at roughly $400 million in its last round, currently sits near $373 million.

Other projects show even steeper disconnects. Camp Network and Treehouse, each previously valued at about $400 million, now carry market caps of roughly $15 million and $16 million, respectively. Everlyn, once valued near $250 million, trades around $26 million, while SoSoValue has slipped from a $200 million valuation to about $152 million.

*VC valuations vs. market caps. Source:* *Fundraising Digest*

“That’s why it's important to keep a cool head and weigh risk across multiple outcomes, before investing,” Fundraising Digest said.

Related: From FTX fallout to fresh capital: Former US chief raises $35M for new exchange

Crypto VC funding stays weak

As Cointelegraph reported, venture capital funding in the crypto sector remained subdued in November, extending a slowdown that has persisted through late 2025.

While total capital raised has been supported by a handful of big rounds, overall deal activity continues to lag, with just 57 disclosed funding rounds recorded during the month.

High-profile funding included Revolut’s $1 billion round and Kraken’s $800 million raise ahead of its anticipated initial public offering, which have masked broader weakness in early- and mid-stage investment.

Magazine: 2026 is the year of pragmatic privacy in crypto — Canton, Zcash and more

Связанные с этим вопросы

QWhat is the main reason for the gap between VC valuations and market caps in crypto projects?

ATighter liquidity forces valuation resets, and during bull runs, VCs tend to overprice projects due to hype, but market sentiment fading leads to a reality check.

QWhich project had the largest percentage drop from its $1 billion VC valuation to its current market cap?

AFuel Network, which dropped from a $1 billion VC valuation to a market cap of about $11 million, representing the steepest decline among the mentioned projects.

QWhat does Fundraising Digest advise investors to do before investing in crypto projects?

AFundraising Digest advises investors to keep a cool head and weigh risk across multiple outcomes before investing.

QHow has overall crypto VC funding activity been in November 2025?

ACrypto VC funding remained subdued in November 2025, with overall deal activity lagging and only 57 disclosed funding rounds recorded, despite a few large rounds supporting total capital raised.

QWhat are two examples of projects that were valued around $400 million by VCs but now have market caps below $20 million?

ACamp Network and Treehouse, each previously valued at about $400 million, now have market caps of roughly $15 million and $16 million, respectively.

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