Is the Bear Market the Perfect Time to Build Your Portfolio? 2025 Funding Slump Reveals a Surprise Investor Leader

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The cryptocurrency market has long been defined by cycles of boom and bust. While many investors retreat during downturns, history shows that bear markets often lay the foundation for the next bull run. Recent data from the first half of 2025 paints a picture of a struggling ecosystem—yet within the gloom, one investor stands out, bucking the trend and signaling renewed confidence.

Despite a nearly 50% drop in overall funding compared to previous periods, the current climate may be ideal for strategic positioning. With valuations corrected and speculative noise reduced, foundational projects are gaining traction. This article explores the shifting landscape of crypto venture capital, identifies key investment trends, and reveals why now might be the best time to enter or expand your portfolio.

👉 Discover how smart investors are capitalizing on market dips to secure early advantages.

Overall Market Downturn: Funding Drops Nearly 50%

Since the collapse of major players like LUNA and FTX in previous years, the global crypto market has remained in a prolonged bear phase. Both primary (private) and secondary (public trading) markets have experienced significant contraction. Data from the first half of 2025 shows a sharp decline across the board.

Total funding volume fell by 46.1% compared to the second half of 2024, nearing a "halving" effect. The number of funding events also decreased substantially, reflecting waning enthusiasm among institutional investors. This sustained pullback marks five consecutive quarters of declining investment activity—a clear sign that caution dominates current sentiment.

Even so, this downturn isn't without precedent. Past bear markets have historically served as fertile ground for long-term value creation. As fear spreads, strong projects continue developing, often with leaner teams and more sustainable models. For forward-thinking investors, these conditions offer rare opportunities.

Infrastructure Dominates as the Most Resilient Sector

Despite shrinking totals, certain patterns in investor behavior remain consistent. Blockchain infrastructure continues to lead both in funding amount and frequency, proving its status as the backbone of Web3 innovation.

Among the top 10 funded projects in early 2025:

This concentration underscores a strategic preference: when uncertainty reigns, investors favor "picks and shovels" over end-user applications. Just as gold rush investors profited from selling tools rather than digging for gold, today’s VCs are backing foundational technologies that enable broader ecosystem growth.

Notable infrastructure leaders include:

While CeFi projects saw fewer rounds, they attracted larger average investments—suggesting that when institutions do commit, they prioritize capital efficiency and regulatory clarity.

The Rise of DWF Labs: A Bullish Signal in a Bear Market

Amid widespread retrenchment, one firm has emerged as a standout: DWF Labs. With 32 investments in the first half of 2025, it outpaced all other known venture firms.

Unlike traditional giants such as a16z—which made only 14 investments during the same period—DWF Labs operates with an aggressive, counter-cyclical strategy. On its website, it boldly states: “Regardless of market conditions, we aim to invest in five projects per month.”

Founded in 2022, DWF Labs combines venture investing with market-making and OTC trading services. Its approach is direct: acquiring tokens at early stages, often through private sales. According to managing partner Andrei Grachev, volatile markets present optimal entry points due to lower valuations and reduced competition.

DWF Labs is part of Digital Wave Finance (DWF), one of the world’s top crypto trading firms, active across 40+ exchanges. This deep market integration likely provides real-time insights and liquidity advantages—key enablers for its high-frequency investment model.

Their activity sends a powerful signal: confidence isn’t dead. For retail and institutional participants alike, DWF Labs’ actions echo Warren Buffett’s famous mantra: “Be fearful when others are greedy, and greedy when others are fearful.”

👉 See how early movers use market volatility to gain long-term positioning.

How Major Investors Are Allocating Capital

Different firms exhibit distinct strategies:

These patterns suggest two schools of thought: some double down on fundamentals; others bet on future consumer adoption in gaming and digital identity.

Top Funded Projects of Early 2025

Here are the most capitalized projects this year—and what makes them stand out:

  1. Blockstream – Advancing Bitcoin’s utility via Liquid Network and enterprise-grade sidechains.
  2. LayerZero – Solving cross-chain interoperability with trust-minimized message passing.
  3. Worldcoin – Leveraging biometric verification (via Orb device) to build a globally inclusive digital identity and currency system.
  4. Ledger – A leader in secure hardware wallets and institutional custody solutions.
  5. Auradine – Developing next-gen internet infrastructure using AI and zero-knowledge tech.
  6. Chain Reaction – Building privacy-enhancing computing units (3PU™) for secure cloud operations in finance and healthcare.
  7. Taurus – Offering regulated infrastructure for tokenized assets and digital securities.
  8. Salt Lending – Providing crypto-backed loans using blockchain assets as collateral.
  9. Unchained Capital – Focused on Bitcoin-native financial services like joint custody and retirement accounts.
  10. EOS – Supporting decentralized application development on a high-performance public blockchain.

Many of these projects share common traits: technical depth, real-world applicability, and strong institutional backing.

Frequently Asked Questions (FAQ)

Q: Why invest during a bear market?
A: Bear markets reduce speculation and correct overvaluations. Strong projects survive and mature quietly—offering better entry prices and higher long-term potential.

Q: Is infrastructure really more valuable than apps?
A: In early-stage ecosystems, infrastructure is essential. Just like roads precede cities, robust networks must exist before mass adoption of dApps or games can occur.

Q: Can one firm like DWF Labs really influence the market?
A: While no single investor controls outcomes, consistent capital flow restores confidence, supports project development, and can catalyze broader market recovery.

Q: Are VCs avoiding risk entirely?
A: No—they’re being selective. The drop in volume reflects prudence, not total withdrawal. Many are waiting for clearer regulations or technological milestones before deploying large sums.

Q: Should retail investors follow VC trends?
A: Not blindly—but tracking where smart money goes can highlight promising sectors. Combine institutional insights with personal research for best results.

Q: Will secondary market gains boost primary funding?
A: Historically, yes. When traders profit on exchanges (secondary), they reinvest into new ventures (primary). Rising Bitcoin prices often precede funding rebounds.

Final Thoughts: Opportunity in Adversity

The first half of 2025 has been tough for crypto fundraising—but not hopeless. While overall figures show contraction, the persistence of strategic investors like DWF Labs suggests underlying strength.

Bear markets test resolve. They separate hype-driven projects from those solving real problems. For informed participants, this is not a time to exit—but to observe, analyze, and position wisely.

As Bitcoin recovers from its lows—surpassing $31,000 after hitting $16,500—the secondary market is already showing signs of life. When sentiment shifts upward, early backers stand to benefit most.

👉 Learn how to identify high-potential projects before the next surge begins.

The next bull cycle won’t emerge from nowhere—it’s being built right now, block by block, investment by investment.