The truth about the cooling of the crypto market: venture capital valuations and actual market caps are being comprehensively reassessed

As the cryptocurrency market continues to be in a downturn, the huge gap between the actual market value of many blockchain projects and their early-stage venture capital valuations has been thoroughly exposed. CryptoRank summary data shows that many crypto startups once favored by venture capital firms and valued near or even reaching unicorn levels now have a market cap only a small fraction of their previous valuations, reflecting a systemic valuation reset amid tightening liquidity.

Data indicates that Humanity Protocol was once valued at nearly $1 billion in venture capital funding, but its current market cap is about $285 million. Fuel Network was similarly valued close to $1 billion during its funding stage, but its current market cap is only around $11 million. Bubblemaps experienced a similar situation, with its VC valuation reaching a high point, but now its market cap is only about $6 million.

CryptoRank’s Fundraising Digest points out that during bull markets and narrative-driven phases, venture capital often assigns overly aggressive valuations to projects. However, when market sentiment recedes and hype dissipates, the public market quickly corrects these “idealized prices.” This process is prominently reflected in the current cycle.

Not only high-valuation projects, but also mid-valuation projects have not been spared. Plasma was once valued at about $500 million, but its current market cap is approximately $224 million; ICNT’s valuation dropped from $470 million to about $247 million; DoubleZero, though relatively stable, still has a market cap below its previous funding valuation of around $400 million.

Some projects have experienced even more dramatic declines. Camp Network and Treehouse were valued at about $400 million each, but now their market caps are only about $15 million and $16 million, respectively. Everlyn fell from nearly $250 million in valuation to about $26 million, and SoSoValue dropped from $200 million to approximately $152 million. These cases highlight the highly inflated pricing of crypto projects during the last bull market.

Meanwhile, the overall environment for crypto venture capital remains weak. Data shows that in November, only 57 funding deals were disclosed. Although Revolut’s $1 billion funding and an $800 million pre-IPO funding round for a major CEX boosted the total, the activity for early and mid-stage projects continues to be under pressure.

In the current crypto market environment, valuation normalization is becoming the main theme. For investors, re-evaluating the relationship between VC valuations, token market caps, and fundamental fundamentals may become a key skill to navigate cycles.