The Q3 total trails only the first quarter's $4.8 billion in investments. Seven deals accounted for half of all capital raised during the period.
Crypto News
Venture capital investment in blockchain startups hit $4.65 billion during the third quarter, marking the second-highest level since the FTX collapse in late 2022. Galaxy Digital's head of research Alex Thorn released the findings Monday, showing a 290% jump from the previous quarter.
The Q3 total trails only the first quarter's $4.8 billion in investments. Seven deals accounted for half of all capital raised during the period. Financial technology company Revolut led with a $1 billion investment, followed by crypto exchange Kraken at $500 million and crypto-focused bank Erebor with $250 million.
Activity remains below the 2021-2022 bull market peaks but shows sustained health across multiple sectors. Stablecoins, artificial intelligence, blockchain infrastructure, and trading platforms continue to attract significant deal flow and capital. Pre-seed activity has maintained consistent levels throughout the quarter.
The quarter saw a total of 414 venture deals completed. Established companies founded in 2018 captured most of the capital raised, while firms founded in 2024 recorded the highest number of deals. Pre-seed deal count as a percentage has declined as the industry matures.
Adoption by traditional players and venture-backed firms achieving market fit suggests the golden era of pre-seed crypto venture investing may have passed. Competition from AI startups for investment capital and higher interest rates have dampened venture allocations broadly. Previously hot sectors like gaming, NFTs, and Web3 have seen waning interest.
Spot exchange-traded products and digital asset treasury companies may be competing for investor attention. Large pension funds and hedge funds making high-profile investments in spot-based Bitcoin ETPs suggest some allocators prefer liquid vehicles over early-stage VC investing. Macro trends continue to present headwinds for allocators.
Regulatory environment shifts could bring resurgent allocator interest in the space. The U.S. accounted for 47% of capital invested and 40% of deals completed. The United Kingdom saw 28% of capital and 6.8% of deals, while Singapore captured 3.8% of capital and 7.3% of deals.
Despite previously hostile U.S. regulations, U.S. dominance in deals and capital has historically persisted. The crypto-friendly Trump Administration and passage of the GENIUS Act into law are expected to strengthen this trend.
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