Galaxy Digital’s head of research, Alex Thorn, said in a Monday report that Q3 investment levels marked a 290% jump quarter-on-quarter, trailing only Q1’s $4.8 billion. Despite remaining below the frenzy of the 2021–2022 bull market, Thorn noted that VC activity now appears “active and healthy,” supported by growing interest in stablecoins, AI, blockchain infrastructure and trading technology.
Crypto venture capital activity bounced back sharply in the third quarter, recording $4.65 billion in investments, the second-highest level since the collapse of FTX in late 2022, which had rattled confidence and slowed funding across the sector.
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Big money concentrated in a few deals
Although Q3 logged 414 deals, only seven transactions accounted for nearly half of all capital raised. The largest included Revolut ($1 billion), Kraken ($500 million), and Erebor, a crypto-focused US bank ($250 million).
Most of the funding went to companies founded around 2018, while 2024 startups secured the most deals, a sign that investor confidence is returning, albeit cautiously.
Thorn noted that as the industry matures, pre-seed deal activity has steadily declined. With traditional players increasingly adopting crypto and many VC-backed startups now achieving product-market fit, he suggested that the “golden era” of early-stage crypto investing may be fading.
VC activity stagnates as ETFs and treasuries take priority
Despite rising crypto prices over the past two years, venture capital has not mirrored the surge, a break from the strong correlation seen during the 2017 and 2021 bull runs.
Thorn attributes this decoupling to reduced excitement around previously hot sectors like NFTs, gaming, and Web3, competition from booming AI startups, and higher global interest rates that are dampening venture appetite.
He added that investor focus is increasingly shifting toward spot Bitcoin ETPs and digital asset treasury products, with pension funds and hedge funds opting for highly liquid exposure rather than backing early-stage crypto startups.
The United States maintained its position as the top destination for crypto venture capital, attracting 47% of all quarterly funding and accounting for 40% of completed deals. The United Kingdom followed with 28% of capital raised, while Singapore drew 3.8%. Deal volume showed a similar pattern, with Singapore (7.3%) and the UK (6.8%) trailing the US.
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