Crypto VCs Tighten the Belt: No More 80x Revenue Dreams
Crypto startups that demand valuations 50 to 80 times their revenue are facing pushback from venture capital (VC) firms, according to 10T Holdings CEO Dan Tapeiro.
Speaking at the Consensus conference in Toronto, Tapeiro told the audience that 10T Holdings turned down over 200 companies, including defunct FTX, BlockFi, and Celsius, due to their unsustainable valuations. The firm, which focuses on projects valued above $400 million, targets a valuation-to-revenue multiple of 10x or less to ensure strong returns and smoother exits.
Tapeiro warned that inflated valuations affect and risk the follow-on funding and exits, similar to general VC caution in a market shaped by past collapses. This selective approach puts pressure on startups to adopt more realistic valuation models to attract investment.
Crypto Funding Doubles to $6B, Yet Deals Grow Scarce
Crypto venture capital funding doubled to $6 billion across 405 deals in Q1 2025, up from $3 billion in Q4 2024, as revealed in PitchBook’s May 13, 2025, report. The deal count rose 8.8% from 372 deals in Q4 2024 due to the spot Bitcoin ETF approvals that attracted institutional investors.
PitchBook predicts $18 billion of crypto VC investment in 2025, up 50% from 2024’s estimated $12 billion, a sign of strong market confidence. However, the year-on-year deal count fell 39.5% from 670 in Q1 2024, showing a more cautious investment pace following valuation concerns.
VCs Navigate Crypto’s Risks with Diversified Strategies
Industry leaders are suggesting strategies to balance crypto’s risks and rewards. Pantera Capital CEO Dan Morehead recommends diversifying investments across private equity and tokens to manage market volatility.
Pantera’s portfolio, with its history of returning on 86% of its startup investments and 22 graduating to unicorn status, is the best the industry has to offer. High-profile failures like FTX show the dangers of overvaluation, pushing some startups toward token sales, which face regulatory difficulties.
VCs are advised to concentrate on lower valuation-to-revenue multiples and diversified portfolios for the sustainability of returns.
As of May 15, 2025, the crypto VC sector shows a delicate balance: strong funding growth tempered by demands for valuation discipline to safeguard long-term stability.
