Crypto Venture Funding Surges to $4.6B in Q3, Marking Strongest Quarter Since Early 2023
Global investment into crypto startups rebounded sharply in the third quarter, reaching $4.65 billion, the second-highest level since the collapse of FTX in late 2022 sent venture funding in the sector into a prolonged freeze.
A report released Monday by Galaxy Digital’s head of research, Alex Thorn, shows that venture commitments jumped 290% from the previous quarter, approaching Q1’s peak of $4.8 billion.
While activity remains far lower than the exuberant highs of 2021–2022, Thorn said the current pace reflects a market that is “active and healthy,” with interest clustering around stablecoins, AI-linked projects, core blockchain infrastructure, and trading technologies.
A Few Big Deals Drove Half the Quarter’s Funding
Although Q3 saw 414 venture deals, funding remained highly concentrated. Just seven deals accounted for 50% of the capital raised, according to Cointelegraph.
The largest was a $1 billion raise by fintech giant Revolut, followed by Kraken’s $500 million round and a $250 million raise by crypto-focused U.S. bank Erebor. More mature companies (those founded around 2018) attracted most of the quarter’s capital, while firms created in 2024 made up the bulk of the deal count.
Thorn noted that pre-seed investing is shrinking as the industry matures. With more established firms finding real market traction and traditional players entering crypto, the era of small, early-stage speculative bets appears to be fading.
A Disconnect Between VC Funding and Crypto Market Prices
One standout trend in recent years has been a weakening link between crypto prices and venture activity. Historically, bull markets in 2017 and 2021 produced strong alignment: when Bitcoin surged, VC money flooded in. But since late 2022, that pattern has broken down.
Thorn attributes the subdued investment environment to multiple factors:
- Declining interest in previously hot categories like Web3, NFTs, and gaming
- Heavy competition from AI startups
- Tighter monetary policy and higher interest rates
Another force reshaping the landscape is the rise of spot Bitcoin exchange-traded products (ETPs) and digital asset treasury firms. Large investors, such as pension funds, hedge funds, institutions, may now prefer exposure through these liquid, regulated vehicles rather than riskier early-stage startup investments.
Regulation Could Reignite Venture Interest
Thorn said macro uncertainty continues to weigh on allocators, but regulatory progress could shift that. Clearer legal frameworks in major markets, especially the United States, may encourage institutional investors to re-engage in venture deals.
United States Leads Global VC Activity Once Again
The United States continued to dominate crypto venture activity in Q3.
- 47% of capital invested went to U.S.-based companies
- the United Kingdom captured 28%
- Singapore took 3.8%
The U.S. also led deal count with 40% of transactions, followed by Singapore at 7.3% and the U.K. at 6.8%.
Despite complaints about regulatory uncertainty in previous years, the U.S. has consistently attracted the largest share of crypto venture capital. Thorn expects this to strengthen under the crypto-friendly Trump administration and following the passage of the GENIUS Act, which aims to standardize rules across the digital asset sector.
“U.S. dominance is likely to grow,” Thorn wrote, especially if Congress advances market structure legislation that could bring traditional financial institutions more fully into the industry.
