Before the Breakout: How Capital Repriced Crypto for 2026 — From Winter to Infrastructure

2025 wasnt a bull-market resetit was a quality-driven recapitalization. Funding surged to $30B+ YTD by Q4(with ~$13B in Q3) after the 2024 trough (~$9B), but deal count didnt expand meaningfully, implying larger, more selective checks and a fat-tail headline. Investors crowded into compliance-ready railspayments/stablecoins/RWA, infrastructure, regulated trading, and info marketswhile consumer narratives stayed lighter. Geography is turning multipolar, with clearer licensing hubs pulling weight outside the U.S. What matters next: where the new default institutional stack is formingand who controls distribution in 2026 1. Total Capital Invested and Deal Count Crypto venture funding hit a cyclical low in 2023 and then rebounded strongly in 20242025. In 2023, venture investors deployed roughly $12B into crypto startups a 72% drop from 2022s total as the frothy valuations of 20212022 gave way to bear-market caution. About 1,500+ deals were closed in 2023. In 2024, the market entered a clear trough. Total crypto VC investment fell to $9B in 2024 (-28% YoY decrease from 2023), and deal count fell slightly to ~952 deals for the year. Funding accelerated particularly in H2 2024 for example, Q4 2024 saw $3.2B across 261 deals, a 46% jump in capital from Q3 despite a 13% drop in deal count as investors focused on larger bets. 2025 has been marked by a huge resurgence in capital deployment. By Q4 2025, year-to-date funding exceeded $30B, already surpassing 2024s total by $21B. Quarterly investment hit multi-year highs e.g. Q3 2025 alone saw ~$13B raised (the biggest quarter since Q1 2022). This was partly driven by a small number of mega-deals, which skewed aggregate averages but did not alter the underlying upward trend. Even so, the underlying trend is positive: excluding outliers, Q1Q3 2025 funding was still roughly double the same period in 2024.In contrast, deal counts in 2025 have not grown commensurately in fact, some data suggests deal volumes may have stagnated or declined relative to 2024. For instance, there are ~800+ startup VC deals in 2025 YTD, down ~13%. The average deal size jumped as a result. In short, 2025s increase in capital was driven by bigger checks rather than more startups funded. Quarterly momentum: This momentum accelerated into H1 2025: Q1 2025 reached ~$4.8B (highest since Q3 2022), and although Q2 dipped to ~$2.0B (after the Binance boost in Q1), Q3 2025 rebounded ~+47% QoQ to $13B.In other words, by mid-2025 the quarterly run-rate of crypto venture investment was back on par with early-2022 levels. Mega-deals skew on averages: Mega-deals meaningfully distorted headline fundraising figures in 2025, creating a pronounced divergence between mean and median deal sizes. Binances $2B round in Q1 the largest VC transaction in crypto history accounted for ~34% of the quarters $5.8B total. Late 2025 showed a similar pattern. Polymarkets $2B raise and Kalshis $1B round (at an $11B valuation) will meaningfully inflate Q4 totals. The year also featured $300M for XY Miners, multiple $200M+ rounds across privacy, security, and infrastructure, and numerous $50M$150M raises spanning L1s, L2s, and fintech. Additional outliers including Ripples $500M strategic round and Bullishs $1.11B IPO contributed to a pronounced fat-tail distribution. These mega-deals lifted average deal size, increased late-stage share, and widened the gap between mean and median. While highlighted for completeness, analysis of medians and ex-mega-deal trends is essential to reveal the underlying market: most deals remain small, even as a handful of ultra-large financings dominate aggregate capital. Big-picture: Relative to the last cycles peak (2021early 2022), current funding levels remain moderate. At the 2021 peak, crypto startups raised over $36B in a year (2021), fueled by a frenzy of seed deals and lofty valuations. 2022 saw over $44B (front-loaded before the market crash). In contrast, 2023s ~$12B and 2024s ~$9B indicate a reset to more sustainable levels. The 2025 revival on track to $30B+ signals that the crypto venture market is climbing out of the winter, but with a very different character: more late-stage focus, more due diligence, and an emphasis on quality over quantity of deals. As we detail below, investors in 2025 gravitated toward certain sectors and stages, backing fewer but stronger projects, and positioning for what many expect to be a next growth cycle in 2026 and beyond. 2. Deal Size Distribution The deal size distribution in 20232025 reflects a clear shift toward larger rounds. In 2024, deals under $10M accounted for over 75% of all activity, with the $510M bracket alone contributing ~76%. By contrast, in 2025 the $10M share fell to ~61%, while most growth occurred in the $1050M and $50M+ segments, producing a more pronounced barbell structure: early-stage activity concentrated in sub-$5M rounds, a thinner $15M middle, and a notable rise in large tickets at the upper end. Several dynamics drove this shift: Stage correlation: Late-stage rounds accounted for ~45% of total capital (or deal count, specify, while early-stage rounds (SeedSeries A) remained mostly under $10M. By Q3 2025, ~10% of all deals exceeded $50M (vs. ~8% in 2024), signaling the return of large-check deployment. Category correlation: Mega-rounds clustered around CeFi and infrastructure exchanges, brokers, and core blockchain systems frequently raised $100M+. Meanwhile, Entertainment and gaming/NFT projects remained in the lower brackets, typically sub-$5M. Investor correlation: Sub-$1M micro-rounds came primarily from angels and niche crypto funds, with fewer accelerator-led deals in 2025. Mega-rounds, in contrast, were led by large TradFi institutions and corporate VCs. Overall, the market has bifurcated: most deals remain under $10M, but a small set of $50M+ and $100M+ rounds captures a disproportionate share of total capital, shaping the aggregate statistics despite representing a minority of transactions. This comparison underscores the growing polarization in deal sizes 2025 had relatively fewer mid-sized rounds and proportionally more very large rounds than prior years. For venture investors and startup founders, this means the fundraising market has become go big or stay small: substantial capital is available for top-performing later-stage projects, while early-stage teams face more competition for smaller checks. 3. Fundraising by Stage (Pre-Seed, Seed, Early-Stage, Late Stage, Undisclosed) Crypto funding stages shifted sharply from 2023 to 2025. In the 202223 downturn, late-stage rounds nearly vanished, leaving 2023 dominated by Pre-Seed, Seed, and occasional Series A deals. By mid-2025, the landscape reversed: Series B+ rounds captured the majority of total capital, while early-stage activity remained the core driver of deal count. As confidence returned, undisclosed-stage raises declined. Pre-Seed Pre-Seed deal share stayed surprisingly high in 20232024, even rising slightly in 2024evidence of steady founder activity despite market stress. These rounds were very small in dollar terms, contributing only a few percent of total capital, often involving DAO grants or accelerator-style raises. Crypto-native funds continued backing pre-seed teams for low-cost optionality, keeping this pipeline consistently active. Seed Seed activity remained steady across 20232025 but with smaller checks than the 2021 cycle. Roughly 65% of 20232024 deals were under $5M, reflecting Seed/Seed+ norms. Median seed size gradually improved (~$2.5M ~$3M), showing modest appetite recovery even as seeds share of total capital fell with the return of larger rounds. In 2025, seed raises became somewhat easier but required stronger traction or technical proof, replacing the idea-stage momentum of 2021. Early-stage (Strategic Series A) Early-stage was constrained in 2023, as few 202122 projects were healthy enough to raise full rounds. Conditions improved in 2024, with median early-stage rising ~26% to ~$4.8M and most rounds falling in the $1050M range. By 2025, early-stage accelerated as bear-market builders matured. Many early-stage roundsespecially in infrastructure and DeFimoved into the $1050M range. Early-stage still dominated deal volume (24% of all deals), but its share of total capital dropped to ~48%, overtaken by late-stage deployment. Late Stage (Series B+) Late-stage funding nearly vanished in 20222023, when post-unicorn failures pushed growth investors to the sidelines. Late-stage accounted for only ~1015% of 2023 capital. Momentum returned in 2024: by Q4, Series B+ represented ~40% of quarterly capital. The full rebound arrived in 2025over half of H1 2025 capital flowed into late-stage, though highly concentrated: a dozen to two dozen deals formed most of this 52% share. Early-stage remained high in volume, but late-stage rounds dominated dollars. Undisclosed / Unknown Stage In 2023, many companies avoided stage labels to mask down-rounds or bridge financings, creating a large Undisclosed category. As sentiment improved in 20242025, founders returned to standard labeling, reducing opacity. Strategic roundsespecially from exchangesstill appeared but were classified as late-stage due to size. Overall, 2025 featured far fewer undisclosed rounds, reflecting a healthier and more transparent market. Stage Skew Rationales The stage rotation from 2023 to 2025 reflected clear market dynamics. In 2023, investors avoided late-stage risk, concentrating on early-stage rounds where valuations were low and bridge extensions could be raised discreetly. Late-stage funding fell to ~1015% of total capital, and Series A/B compressed into small extension rounds. As sentiment improved in 20242025, growth rounds reopened. By Q2 2025, 52% of capital flowed into later-stage deals, supported by regulatory clarity and stronger business fundamentals. Average late-stage check sizes remained stable ($6.4M $6.3M from 2023 to 2024), while early-stage averages rose to $4.8M, signaling renewed confidencebefore 2025s mega-rounds pushed overall averages sharply higher. Crucially, early-stage didnt weaken. Crypto-native funds maintained pre-seed and seed activity through 20232024 and shifted to a barbell strategy in 2025: active pre-seed pipelines paired with concentrated late-stage deployment. Series A/B, thin in 2023, expanded again in 2025 as maturing bear-market builders returned to market. In essence: 2023 = early-stage survival, 2024 = first late-stage rebound, 2025 = full late-stage comeback, with 2026 likely more balanced if macro conditions allow. 4. Fundraising by Categories (Main-Categories) Sector (Sub-Categories) 4.1.Main Categories: Over the past three years, investor sector preferences have rotated significantly, mirroring the changing narratives in crypto. In the 2021 bull, hot areas were DeFi protocols, NFTs/Gaming, and Web3 consumer apps, while by 202324 many of those fell out of favor, replaced by focus on core infrastructure, financial plumbing (stablecoins, custody), and new themes like real-world assets (RWA) or AI+crypto. The data shows clear shifts in which main categories (broad sectors) attracted the most capital in 2023 vs 2024 vs 2025: CeFi CeFi hit its post-FTX low point in 2023: most raises were distressed, sector share collapsed, and CeFi fell from 2021s top-funded vertical to the bottom. A mild recovery began in 2024, led by regulated exchanges in Asia/Middle East and improving U.S. sentiment after the late-2024 pro-crypto Congress.In 2025, CeFi re-entered the market with a few headline rounds, most notably Binances $2B raise, which significantly inflated H1 totals. Excluding this outlier, CeFi remained smaller than DeFi but clearly rebounding, with capital concentrating in compliance-aligned, institutional exchanges. Examples include EDXs $85M raise (2023)during a weak market. Overall, CeFi bottomed in 2023 and began a gradual, regulation-driven recovery through 20242025. DeFi After the 202021 boom, DeFi cooled in 202223 as token prices fell, but remained a core category. 2023 funding centered on infrastructure-like DeFi (DEX aggregators, liquidity providers, risk tools) while speculative tokens faded.Narratives shifted in 2024 toward real yield and TradFi integration, pushing DeFi/financial infrastructure to the top-funded category in several market reports.Momentum accelerated in 2025: DeFi-related startups led all categories with $6.2B in H1, driven by stablecoin issuers, institutional DeFi, and financial infrastructure. Round sizes increased as institutional demand for compliance, revenue-generating protocols grew (derivatives, KYC pools).DeFi dominated deal count in 202324 with small rounds; larger checks only returned in 2025partly on the back of major stablecoin deals. Funds like Pantera, Dragonfly, and Multicoin remain bullish heading into 2026. Infrastructure Infrastructure was a top-funded category across 20232025. With application hype fading in 2023, capital rotated into L1s, L2 scaling, interoperability, dev tooling. Strength carried into 2024, where infra/Web3 saw +33.5% QoQ in Q4 2024, reaching $592M (16% of capital) across 53 deals, ranking #2 by capital and deal count.H1 2025 accelerated further: L1/L2 ecosystems raised ~$3.3B, making infrastructure the second-largest category after DeFi.Mining returned as a sub-sector: a $300M mining deal in Q2 2025 made Mining the top category that quarter, amplified by AI-driven compute demand.Themes evolved each year 2023: scalability/zk-rollups; 2024: modular/app-chains; 2025: identity, compliance, real-world integrations.Infrastructure consistently captured large round sizes, high valuations, and remained foundational heading into 2026. Payments Stablecoins Payments and stablecoins became a standout category from 20232025 as real-world utility took center stage. After the 2022 fallout, stablecoins proved the most scalable use case: by Q4 2024, stablecoin businesses captured 17.5% of total funding, boosted by Tethers major raise.Capital then expanded toward asset-backed stablecoins, payment rails, cross-border infra (e.g., Circles Elements acquisition, Ripples ecosystem investments). In H1 2025, stablecoin/payment networks pulled in ~$1.5B, reflecting rising adoption and yield-driven demand. VCs backed wallets with embedded payments, merchant integration, compliant processors, and emerging-market issuers. AI x Crypto AIcrypto convergence emerged as a real narrative from 20232025. Early rounds in 2023 were small (Fetch.ai, SingularityNET, a handful of seed-stage entrants).By 2024, AI+blockchain gained traction but remained minor. Small checks went to ChainGPT, AI marketplaces, and decentralized compute.The category broke out in early 2025 with ~$0.7B raised, its first meaningful capital cycle. Notable deals included Gensyns $43M (decentralized compute) and multiple AI-driven trading/security platforms.While retail chased 2024s meme-AI tokens, VC capital focused on compute, automation, agentic systems, and early infrastructure for decentralized AI. By 2025, AI+crypto grew from near-zero (2022) to a credible niche (~$700M), positioned for stronger expansion in 2026. RWA (Real-World Assets) Tokenization RWA tokenization became a top cross-sector narrative by 20242025.2023 activity was early: Maple Finance pivoted to RWA lending; several pilot programs emerged. Momentum grew in 2024, with projects raising to tokenize bonds, treasuries, ETFs (Ondos $10M, Matrixdock, Backed Finance).By 2025, RWA became a core venture theme and a major driver within DeFi/financial infra. Much of H1 2025s $6.2B DeFi/Infra funding came from RWA-aligned startups: stablecoin issuers, tokenized funds, compliant lending pools, and yield products backed by real collateral.Though datasets rarely separate RWA as a standalone category, it became one of the fastest-growing, institution-ready verticals entering 2026. Middleware Others Middleware (developer APIs, indexers, compliance tools) remained smaller but steady from 20232025. Security/compliance startups attracted ~$1.2B in H1 2025, driven by enterprise demand and regulatory requirements. Developer infra (compute/storage: Filecoin ecosystem, Akash, etc.) saw moderate traction.Social/Web3 Social had isolated wins (Farcasters $30M, friend.tech clones) but lacked broad PMF, keeping deal share limited. Entertainment (Web3 Social, NFTs, Gaming) Once leading categories in 2021, NFTs/gaming collapsed in 2023 as hype evaporated. Throughout 202324, most VCs avoided the sector; reports noted gaming/metaverse/NFTs failed to capture significant attention.However, Q4 2024 showed a misleading spike: Web3/NFT/Gaming became #1 by deal count (22%) and reached ~$771M (21% of capital) almost entirely due to Praxiss $525M mega-round.In H1 2025, the sector returned to baseline with ~$0.6B (~5% of total)mostly early-stage. Many teams pursued token raises instead of equity, further reducing VC visibility. By 2025, interest ticked up slightly (better-quality games, stronger NFT infra), but mainstream VCs remained cautious. High deal count, low capital share: a classic prove-it phase. Category trends show a clear rotation across cycles: 2023: Infrastructure and middleware dominated the sparse funding landscape as investors avoided consumer apps. 2024: Stablecoins and financial infrastructure surged, Infrastructure and Web3 held secondary positions, while entertainment sectors remained quiet. 2025: Serious verticalsDeFi (particularly RWA/stablecoin) and Infrastructure (L1/L2)captured nearly 75% of all H1 2025 funding, while Entertainment (NFTs/Gaming) slid to 5%. AI, RWA, and Security/Compliance became meaningful contributors. Despite capital concentration in a few power categories, the investable universe broadened. More segmentsprivacy, identity, AI, decentralized physical networksattracted funding compared to 201920, showing a maturing, more diversified crypto VC landscape. 4.2. Sub-Categories and Emerging Narratives Sub-sector flows from 20232025 show capital clustering around a handful of dominant narratives rather than evenly across the market. Across the 20 largest verticals, roughly $33.5B was raised from 20232025, with just five categoriesExchanges, Asset Management, Payments, Layer-1, and Prediction Marketsabsorbing ~53%. Funding fell from ~$6.1B (2023) to $3.6B (2024) before surging to $20B in 2025 as late-stage and mega-rounds returned. Exchanges, Launchpads Trading Exchange funding vanished in 202324 post-FTX, with almost no fresh capital until 2025. The reversal was dramatic: Exchanges raised ~$5.1B in 2025 alone, ~87% in late or undisclosed rounds. Launchpads and trading venues added another ~$2.0B across 202325, with $1.5B+ in 2025, mostly late-stage ($50100M+).Together, the broader trading stack (Exchange + Launchpad + Trading + Data) grew from $0.6B (2023) and $0.4B (2024) to ~$7.8B in 2025, driven by recapitalization of licensed CEXs, token-launch infra, and market-data providers. By 2025, investors were again funding centralized liquidity hubsonly when paired with licensing and compliance. Asset Management, Custody, Yield RWA Asset Management was the #2 sub-category, raising ~$4.35B in 202325, with ~$3.8B in 2025 alone. About 60% of this was late-stage, reflecting scaled managers building CeDeFi/RWA portfolios; another 20% remained Seed-stage, showing continued creation of new managers. Custody added ~$0.48B, Yield protocols ~$0.27B, and RWA platforms ~$0.62B with a balanced Early/Late mix.This cluster raised ~$1.3B (2023) $0.5B (2024) ~$4.6B (2025) as tokenized treasuries, credit funds, and yield-bearing stablecoins moved from pilot testing to distribution.Investors increasingly view asset managers + custody + RWA rails as a single structural bet on institutional on-chain portfolios. Security, Custody, Lending Credit Security/compliance middleware remained essential, raising ~$0.49B (202325), with ~47% Late-stage and ~23% Early, re-accelerating in 2025 (~$0.25B) amid rising hacks and AML demands. Custody (as above) skewed heavily Late-stage (~70%), reflecting consolidation around institutional-grade providers. Lending/credit raised ~$0.73B: $0.24B (2023) $0.16B (2024) $0.33B (2025). Stage mix was unusual~13% Late, ~35% Early, ~37% Undisclosedconsistent with the sector rebuilding after 2022 CeFi failures and focusing on RWA-backed or under-collateralized credit experiments over large growth rounds. Payments, Stablecoins Data Services These became core infrastructure categories. Payments raised ~$3.0B across 202325, with $2.3B in 2025, ~63% Late-stageappropriate given regulatory + liquidity requirements. Stablecoin platforms added ~$1.9B, rising from near-zero (2023) to ~$1.65B (2025), again Late-stage heavy. Data Services raised ~$1.7B, 65% Late-stage, with $1.2B in 2025, underscoring how analytics, oracles, and risk engines now underpin payments, credit, and RWA issuance. Together, Payments + Stablecoins + Data grew from ~$0.7B (2023) to ~$5.2B (2025)clear evidence that the market is now funding value-transfer + information-transfer rails, not just trading venues. Prediction Markets InfoFi A breakout story of 2025. Prediction markets raised ~$2.68B across 202325all of it in 2025.About 75% of volume was Early-stage, with the rest Late/Undisclosed, reflecting one or two ultra-mega rounds ($500M) into regulated Kalshi-style exchanges plus a long tail of early InfoFi (markets for signals, labels, research). Prediction markets evolved from niche betting to information infrastructure underpinning pricing for macro, credit, and governance riskhence renewed VC conviction. Layer-1, Mining, Computing Infrastructure Layer-1 chains raised ~$2.71B (202325): $0.65B (2023) $0.75B (2024) ~$1.3B (2025). Nearly 48% of L1 capital was Early-stage; ~25% was Late/Undisclosed. Investors still back new execution environments but expect faster ecosystem delivery. Mining/compute infra raised ~$2.38B: $1.1B (2023) ~0 (2024) ~$1.28B (2025). About 74% of mining capital was Late-stage, reflecting industrial-scale BTC mining, energy, and sovereign/infrastructure investors. Pure Computing/DePIN GPU networks remained small (~$50M), mostly Seed/Early, indicating an emerging but not yet scaled storyline. AI, Gaming, Wallets Consumer UX AI was the most active sub-category by deal count: 30+ deals (2023) 40+ (2024) ~70 (2025), totaling ~$2.0B. Stage mix: 20% Seed, 33% Early, 25% Late, 20% Undiscloseda full pipeline from agentic infra to later-stage platforms. Gaming raised ~$1.54B (202325), declining from $0.74B (2023) to $0.42B (2024) and $0.38B (2025)mostly Seed/Early with high Undisclosed share. Wallets raised ~$0.94B, front-loaded in 2023 with dips in 2024 and modest rebound in 2025. Identity tooling brought ~$0.45B, spread across stages. Consumer UX no longer drives the cycle; instead, identity, key management, and AI copilots are quietly gaining traction. Privacy funding remained steady (e.g., Aztecs $100M plus multiple early ZK infra raises).Combined custody/security/compliance reached $1.2B by 2025, reflecting surging institutional demand for compliance rails. 4.3. Conclusion The sub-category view reinforces the core shape of the 2025 cycle: capital concentrated heavily in regulated exchanges, asset managers, payments and stablecoin rails, prediction markets, and heavy infrastructure (L1, mining, data). These sectors absorbed most late-stage and mega-deal volume, while AI, identity, and InfoFi remained early- and mid-stage bets on a more automated, data-driven financial stack. Consumer categoriesgaming, NFTs, SocialFipersisted but no longer defined the cap table. The market has clearly bifurcated. High-conviction, revenue-anchored verticalsstablecoins/RWA, L1/L2 infra, exchange infra, compliance/securitypulled the largest checks, while speculative narratives from the 2021 cycle attracted only selective funding. Capital has shifted from hype to functional, regulated, and institution-ready infrastructure. As 2026 approaches, the test is whether these newly funded railspayments, stablecoins, RWA platforms, prediction markets, compliant CEX/CeDeFi venuesconvert into sustained transaction volume and fee revenue. Investors increasingly expect deeper real-world integration, continued scaling of core infra, and more mature AI convergence, with certain ecosystems (e.g., Solana) well-positioned to benefit. The narrative has moved decisively toward utilitarian, foundational crypto infrastructure. 5. Fundraising by Geography The geographic distribution of crypto venture funding became more diverse from 2023 to 2025, although the United States remains the single biggest locus of investment. We observe a slight decentralization of deal activity away from the US, driven by regulatory uncertainty there and proactive crypto initiatives in other countries. Key regional trends include: United States The US remains the largest crypto-VC hub, though its dominance is gradually easing. Despite regulatory pressure, US startups captured 30%+ of global activity in 2023, ~24% of deals. In 2024, and ~25% of capital and ~36% of deals Q4 2024. In 2025, the US accounted for 31% of capital and 41% of deal count.A temporary dip in Q1 2025 occurred only because Binances $2B Malta-based raise skewed global totals.Going forward, the US should remain the largest market in absolute termssupported by ETF inflows and clearer lawsbut its share is likely to drift slowly downward as Asia and Europe accelerate. Asia (Singapore, Hong Kong, Japan, Korea) Asias footprint expanded sharply from 20232025: Singapore: consistently top-3 by deal count (~9% in Q4 2024, 6.4% in Q2 2025) with stable capital share (~34%). Hong Kong: surged after launching its licensing regime, capturing 17% of global capital in Q4 2024second only to the US; despite small deal count (~23%), reflecting large outlier rounds such as HashKeys $500M. Japan: ranked #3 globally by capital (~4.3% in Q2 2025) driven by major corporate blockchain initiatives. South Korea: highly active in gaming/consumer crypto. By 2025, Asia collectively represents ~2030% of global crypto VC fundingup from ~1015% just a few years earlierdriven by rising CeFi hubs, gaming ecosystems, and funds such as Fenbushi, HashKey, and Yzi Labs. Europe (UK, EU) Europe gained strong momentum after MiCA, offering rare regulatory clarity. The UK captured 22.9% of global capital in Q2 2025, second only to the US, and ranked #2 by deal count (~8%), supported by Londons push to become a crypto hub. Across the EU, multiple hubs strengthened: France (Binance EU HQ, Ledgers $100M raise) Switzerland (~3.7% of Q2 2025 deals; foundation base for major L1s) Germany (regulated crypto financial products) Portugal (founder-friendly) Europe now claims a meaningful and rising share of global VC flows, hosting major DeFi teams (e.g., Aave) and frequent Series A/B raises. With MiCA fully active from 2024 onward, the region is positioned for continued growth. Middle East Other Regions The Middle East is emerging quickly as a crypto-friendly capital hub. The UAE continues attracting exchanges and Web3 teams, supported by sovereign wealth funds. A notable example: Abu Dhabi led a $250M round for Rain in 2023. Regional share remains 5%, but is rising. Latin America and Africa show strong retail adoption but smaller VC volumes; ongoing seed rounds focus on remittances and fintech (Ripple, Bitso, YellowCard). Some teams operate in Global/Remote-first mode, reducing geographic attribution. Undisclosed Geography A subset of rounds remains geographically unspecifiedDAOs, remote teams, or stealth projects. As regulations tightened across 20232025, fewer teams stayed jurisdiction-less; many adopted hubs like Singapore, BVI, UAE for clarity. Conclusion By 2025, crypto VC allocation is clearly becoming multipolar. The US remains the largest hub, but slowly declining in global share. Asia (Singapore/HK/Japan) and Europe (UK/Switzerland/EU) have significantly increased both deal count and capital. Geographic concentration is easing, reflecting the global nature of the ecosystem. If current trends hold, 2026 could show a more balanced distribution hypothetically: US ~40%, Asia ~30%, Europe ~20%, Others ~10%, as increasingly geography-agnostic investors fund teams worldwide. 6. Investor Behavior and Top Investors (20232025) Investor Behavior (20232025): Who Is Actually Deploying Capital? Market Structure: Fewer Funds, More Concentrated Investment Between 2021 and 2024, the number of active US venture firms fell by more than 25% (from ~8,300 to ~6,200), as limited partners concentrated commitments into a handful of large franchises. Financial Times, Crypto VC followed the same pattern: overall funding volumes recovered from the 20222023 trough, but with capital increasingly concentrated in a small core of repeat crypto-native and crossover investors. Inside that tighter market, the top investors in Q3 2025, capturing ~32% of all 2025 YTD transactions. Coinbase Ventures led with ~60 deals in 9 months of 2025, cementing its position as the most active fund. Meanwhile, the 2021-era tourist investors have vanished 2025 belongs to specialized, multi-cycle crypto VCs with real conviction. Who Is Most Active in 2025? This table highlights three key facts relevant for 2025: Coinbase Ventures, Big Brain Holdings, and Yzi Labs (Binance Labs) are extremely active in volume, particularly at early stage. Pantera, Polychain, Paradigm, Dragonfly, Multicoin, Framework form the heavyweight belt: multi-fund platforms with a long track record and high lead ratio, able to write larger checks at Series A+ and growth. Putting dataset and public rankings together, 2025s most active investor cohort is effectively: Early-stage ecosystem amplifiers: Coinbase Ventures, Big Brain Holdings, 1kx, YZi Labs, plus chain-ecosystem funds (Solana Ventures, Polygon, etc.). Full-stack crypto VCs: a16z crypto, Paradigm, Polychain, Pantera, Dragonfly, Multicoin, Framework, Gate Ventures. Strategic corporate/TradFi entrants: bank-backed or corporate vehicles (Standard Chartered/JV, payment companies, fintechs) selectively joining later-stage or strategically important deals. Stage Behavior: From Early-Stage Dominance to a Barbell Market By 2025, the pattern reversed. Funding reached $4.59B across 414 deals, with late-stage capturing ~56% of capital and early-stage ~44%. Q2 2025 alone recorded 31 rounds over $50M, while sub-$1M checks declinedsignaling bigger tickets and a more selective, mature market. The Stage Shift 20232024: Seed/A dominated Many tiny rounds ($1M) Minimal growth capital 2025: A clear barbell pattern: Top early-stage funds (Coinbase Ventures, Big Brain, 1kx, YZi Labs, Framework, Pantera) continued backing pre-seed/seed Growth capital returned aggressively to CeFi, RWA, trading infra, and L1/L2 with $50$500M+ rounds Dataset reflects the same structure: in 9 months of 2025, early-stage still accounts for 60%+ of deal count, but late-stage captures ~3740% of capital (up from mid-teens in 202324). Q3 was further boosted by mega-deals in exchanges, mining/AI compute, and regulated prediction marketsoften involving TradFi and sovereign funds. Sector Thesis Biases: Who Backs What? Across 20232025, sector preferences of leading investors converged around a few structural narratives: Trading, CeFi CeDeFi Trading and CeFi/CeDeFi remained dominant, pulling in ~$2.1B of the $4.59B raised in the reference quarter. Mega-rounds included Binances $2B, Revoluts $1B, and Krakens $500M, backed by multi-cycle giants such as Pantera, Paradigm, Polychain, and Dragonfly, alongside corporate and sovereign co-investors. Gates dataset shows similar patterns: CeFi/trading is a core focus for Binance, YZi Labs, Coinbase Ventures, and OKX Ventures, who deploy strategically to strengthen exchange ecosystems and liquidity networks. DeFi, On-Chain Credit Structured Yield Top crypto-native funds 1kx, Framework, Polychain, Dragonfly, Pantera, Multicoin remained deeply committed to DeFi: perps, restaking, RWAs, and credit. These investors not only provide early capital but often help shape token and governance architecture, effectively designing the emerging on-chain financial system. Infrastructure, ZK Interoperability Paradigm, a16z crypto, Polychain, Gate Ventures, and Dragonfly continued to anchor L1/L2, ZK, data availability, and interop investments. After quieter deployment in 20232024, they returned in 2025 with high-conviction infra bets advanced ZK systems, AI-driven protocols, interoperability layers, and regulated synthetic/prediction markets sectors where technical and regulatory complexity create strong moats. RWA, CeDeFi Tokenized Yield Pantera, Framework, 1kx, Polychain, Dragonfly, and bank-adjacent strategics increasingly targeted RWA issuers, CeDeFi managers, tokenized T-bills, credit funds, and yield-bearing stablecoins. These verticals accelerated from 2024 into 2025, reflecting institutional appetite for compliant, yield-generating on-chain products that bridge Web2 and Web3. AI x Crypto, Consumer, Gaming Coinbase Ventures, Big Brain Holdings, and similar early-stage specialists anchored the consumer/gaming/AI lane, especially across Solana. Their focus blends consumer UX, agentic AI systems, Web3 tooling, and early InfoFi/prediction use cases areas with high experimentation but comparatively smaller tickets than infra or CeFi. 2025 vs 20232024: How Has Investor Behavior Actually Shifted? Concentration vs dispersion:202122 saw hundreds of generalist funds flooding crypto. By 202324, funding recovered modestly ($10.1B $13.6B), but most generalists exited. In 2025, H1 alone surpasses $16B, the market consolidating around ~3050 crypto-native funds (Coinbase Ventures, YZi Labs, Big Brain, 1kx, Polychain, Pantera, Dragonfly, Multicoin, Gate Ventures, Framework) controlling a large share of deal flow. Stage mix: In 202324, early-stage dominated: 85% of capital in early rounds and just 15% in late-stage. In 2025, late-stage returns aggressively shows 56% of capital going to later-stage rounds, driving mega-deals in trading, CeFi, mining/AI infra, and regulated markets. Sector tilt: 2023: Infra, DeFi, L2s lead as the ecosystem rebuilds post-FTX. 2024: RWA, restaking, infra remain strong; early on-chain credit + AI x crypto show up in seed portfolios 2025: Allocations shift to trading/CeFi, CeDeFi managers, RWA, on-chain credit, stablecoin/FX rails, ZK + interop infra, DePIN, and InfoFi/prediction markets, with clear specialization by fund. Net takeaway Across 20232025, crypto VC behavior matured significantly. The 2021-style FOMO cycle has ended; investors now prioritize fundamentals: revenue traction, unit economics, regulatory-ready architectures (KYC, custody), and cash-flowaligned token design. The market is led by a small, disciplined core of crypto-native funds Coinbase Ventures, YZi Labs, Gate Ventures, Big Brain Holdings, 1kx, Polychain, Pantera, Paradigm, Dragonfly, Multicoin, Framework alongside a handful of returning institutional players in late-stage rounds. Deployment has become high-conviction and selective: more capital into fewer but stronger teams, with clearer thematic alignment across CeDeFi, RWA, stablecoins/FX, DeFi infrastructure, and AI-adjacent systems. Early-stage syndicates continue to seed foundational protocols, while late-stage mega-deals are increasingly reserved for regulated exchanges, prediction markets, and institutional asset managers. The chaotic spray-and-pray era is over. The funds that survived the 20222023 downturn now set the tone for the industry, and their synchronized theses with TradFi capital will heavily shape allocation patterns heading into 2026. 7. Structural Drivers Narrative Outlook for 20252026 What drove the fundraising trends in 2025, and what narratives are investors betting on for the future? A confluence of structural forces regulatory developments, macroeconomic shifts, technological breakthroughs, and evolving user demand underpinned the patterns weve discussed. These factors also inform the market narratives that VCs are coalescing around as we approach 2026. Below, we outline the key drivers and emerging narratives: Macro Regulation Capital Rotation The 2025 funding pattern reflected a clear alignment of regulation, macro conditions, and product readiness. As jurisdictions clarified rules (Singapore, HK, EU; later the U.S. via ETFs and policy shifts), capital rotated into compliance-heavy sectorscustody, CeDeFi, payments, RWAand reopened the door for institutional-sized late-stage rounds. With rates peaking and liquidity stabilizing, investors moved out the risk curve, producing fewer deals but larger tickets, concentrated in verticals where policy clarity + macro carry + institutional distribution intersected. Infrastructure Maturity Capital Moves Up the Stack By 2025, Ethereum L2s, new L1s/appchains, modular stacks, and production-grade middleware removed the bottlenecks of earlier cycles. Infra deals split into: Scale-out infra (late-stage L1/L2, mining, compute, data) Frontier infra (ZK, On/Offchain, interop) As infra became good enough, capital shifted upward into exchanges, asset managers, payments, RWA, and prediction marketsthe layers that convert scalability into real users and revenue. These five sub-sectors absorbed ~50% of all capital raised 202325. Product-Market Fit: Stablecoins, RWA Info Markets Lead By 2025, PMF was decisive. Stablecoins payments: strongest global PMF; multi-billion late-stage rounds. RWA structured yield: tokenized T-bills, credit, commodities moved from pilot distribution. Prediction markets/InfoFi: treated as core market infrastructure, not speculation.Meanwhile, low-PMF sectors (metaverse, forks, token-first social) saw capital vanish; gaming/NFT funding shifted to studios and infra. The funding bar heading into 2026: real users, real revenue, real retention. Institutionalization the CeDeFi Convergence The 2025 capital stack became institutional. Large crypto-native funds, banks, sovereign wealth, and corporates wrote the biggest checksmainly into regulated exchanges, asset managers, custody, payments, mining, and prediction markets. They preferred equity-like structures, compliance rails, and RWA/CeDeFi products aligned with existing financial distribution. IPOs and MA re-emerged, pushing late-stage capital toward CeDeFi, where licensed entities combine CeFi scale with on-chain settlement. By 2026, late-stage activity will cluster around CeDeFi, RWA, stablecoins/payments, and regulated information markets, while early-stage funding continues seeding AI, ZK, DePIN, and next-gen infra. Sectoral Narratives Shaping 2026 Gate Ventures vision: link Outlook: A Higher-Quality, Narrative-Driven Growth Phase Pulling these drivers together, the 2026 outlook is cautiously optimistic but clearly quality-biased. If 202324 was about survival and balance-sheet repair, and 2025 was about rebuilding confidence and recapitalizing the core rails, then 2026 is set up as a pragmatic growth year: Total funding can plausibly exceed 2025s levels, but with continued concentration in fewer, larger, institutionally-owned deals. The marginal dollar is more likely to go into CeDeFi, RWA, Yield optimization, Payment/FX rails, regulated exchanges, prediction markets, compliance/identity infra than into speculative consumer apps or unsustainable tokenomics. Narratives around AI agents, BTC ecosystem expansion, DePIN, and decentralized social will drive early-stage experimentation, but capital will reward those that clearly connect to the core financial stack rather than purely to hype. For funds and LPs, this environment rewards clear thematic maps and disciplined underwriting: understanding where each sub-category sits in the regulatory, macro, and infra stack; sizing exposure accordingly; and treating narratives as capital allocation frameworks, not just marketing. If regulation and macro stay broadly constructive, the bets placed in 202325 on the rails stablecoins, CeDeFi, RWA, prediction markets, and compliant infra are likely to form the spine of the next expansion phase in crypto venture. Reference The analysis above is supported by data and insights from Gate Ventures internal funding dataset (20232025 deals), augmented by industry reports, data providers and news Defillama raised data Cryptorank Fundraising data Crypto Blockchain Venture Capital Q3 2025 | Galaxy State of Crypto Fundraising: Q3 2025 Messari State of Crypto Fundraising: Q3 2025 Capital raised: ⬆️ 47% QoQ to $8.21B Deal count: ⬇️ 16% to 480 80 MA deals, top 5 totaling $882M New funds: capital raised up 48% QoQ to $2.28BFull report 👇 Messari (@MessariCrypto) October 16, 2025 Prediction Market Kalshi Raises $1B at $11B Valuation in Mega State of Venture Capital in Crypto, Q1 2025 CryptoRank 2024 Crypto Venture Capital Trends insights4.vc About Gate Ventures Gate Ventures, the venture capital arm of Gate.com, is focused on investments in decentralized infrastructure, middleware, and applications that will reshape the world in the Web 3.0 age. Working with industry leaders across the globe, Gate Ventures helps promising teams and startups that possess the ideas and capabilities needed to redefine social and financial interactions. Website | Twitter | Medium | LinkedIn Read the article at BeInCrypto