Crypto Venture Capital Investment Reaches $4.65 Billion in Q3, Second-Highest Since FTX Collapse

Crypto venture capital funding experienced a significant resurgence in the third quarter, reaching $4.65 billion, marking the second-highest figure since the FTX collapse sent tremors through the sector in late 2022.

Key Takeaways:

• Crypto VC funding soared 290% in Q3 to $4.65B, representing the most robust quarter since early 2023.
• Investment primarily flowed into stablecoins, AI, and blockchain infrastructure, with seven transactions accounting for half of the total funding.
• Pre-seed investment continues to decline as investors show a preference for established companies and shift towards liquid products like Bitcoin ETPs.

This increase signifies a 290% rise from Q2 and indicates the strongest quarter since Q1’s $4.8 billion figure, based on new insights from Galaxy Digital.

Alex Thorn, head of research at Galaxy, remarked that the recovery illustrates a stronger appetite for digital-asset startups among venture capitalists than many had anticipated, despite overall activity remaining below the rapid pace seen during the 2021–2022 bull market.

AI and Stablecoins Lead as Crypto VC Investments Shift Towards Infrastructure

Key sectors such as stablecoins, AI-driven crypto solutions, blockchain infrastructure, and trading technology continued to draw investment throughout the quarter, while very early-stage activity remained stable.

This renewed activity follows nearly two years of subdued investment across the industry. Venture firms significantly reduced their involvement after the revelation of FTX’s multibillion-dollar fraud, which undermined confidence and halted deal flow across almost all areas of the sector.

Despite the notable increase, capital deployment was highly concentrated. Out of 414 venture transactions, merely seven accounted for half of the total funds invested in Q3.

The fundraising during the quarter was heavily concentrated, with a few major players absorbing the majority of the capital.

Revolut led the way with a substantial $1 billion round, followed by Kraken, which raised $500 million, and Erebor, a US-based crypto bank, which secured $250 million.

Key Takeaways:
Bitcoin has surpassed its 50-week MA, historically leading to tests of the 200-week level (~$65–70K)
Liquidity is diminishing, volatility is increasing, and positioning remains excessively long
Tax-loss harvesting and equity pressure could contribute to near-term downside
…

— Galaxy (@galaxyhq) November 24, 2025

Established firms, particularly those founded around 2018, secured the majority of the funding. However, younger companies launched in 2024 represented the highest number of deals, indicating strong early-stage interest even as the overall market matures.

Thorn observed that the share of pre-seed investments has consistently decreased over the past few years.

As more traditional institutions enter the crypto space and existing venture-backed companies find their market fit, “the golden era of pre-seed crypto venture investing has likely passed,” he stated.

In contrast to previous bull runs, the current market cycle has not been accompanied by a corresponding surge in venture financing.

Thorn attributes the stagnation to waning interest in once-popular categories such as NFTs, Web3 gaming, and consumer crypto applications, along with intense competition from AI startups, which continue to dominate the venture landscape.

Rising interest rates also play a role, discouraging venture allocators in general.

Simultaneously, institutional investors seem to be gravitating towards spot Bitcoin ETPs and digital-asset treasury strategies, gaining crypto exposure through liquid, regulated products rather than early-stage investments.

Nonetheless, Thorn believes that regulatory changes, including clearer frameworks in the US, could restore allocator confidence.

US Retains Venture Dominance

The United States remained the focal point of crypto VC activity in Q3, capturing 47% of the invested capital and 40% of completed deals. The UK followed with 28% of the capital, while Singapore accounted for 3.8%.

Despite prior regulatory uncertainties, Thorn anticipates that US dominance will strengthen under the crypto-friendly Trump administration.

“We expect US dominance to increase, particularly now that the GENIUS Act is law and especially if Congress can pass a crypto market structure bill,” he noted.

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