Top crypto VC funds share fundraising and token sale prospects for 2026

Venture investment activities in crypto in 2025 generally aligned with investors’ expectations, but the capital concentration was much higher than initially predicted. Although the total capital injected into the market recovered compared to the previous downturn, most of the funds flowed into a very small group of companies and investment models, causing early-stage startups to face one of the most challenging fundraising environments in years.

The biggest driving force behind this trend is the rise of companies holding digital assets (Digital Asset Treasury – DAT). According to data from The Block Pro, DAT companies raised approximately $29 billion throughout most of 2025, providing institutional investors with a simpler approach to crypto compared to direct investments in startups. Meanwhile, traditional venture capital maintained its scale, reaching about $18.9 billion in 2025, up from $13.8 billion in 2024, but the number of deals dropped sharply. The total number of deals decreased by about 60% year-over-year, to nearly 1,200 transactions from over 2,900 the previous year.

Mathijs van Esch, partner at Maven 11, said he did not anticipate such a high level of capital concentration, especially into DAT companies. He believes this trend reflects a stronger wave of crypto acceptance from organizations, but contrary to initial expectations that more funds would flow into early-stage startups rather than public companies or PIPE deals.

Why early-stage investments declined in 2025

A key reason is the reduction in available venture capital. Rob Hadick, partner at Dragonfly, stated that many crypto investment funds are gradually running out of capital from previous funds and are facing difficulties raising new rounds. Investor demand from (LP) has cooled since the peaks of 2021–2022, especially as many funds underperform compared to Bitcoin and other risk assets. This directly reduces the funds available for seed and pre-seed investments.

Simultaneously, a clearer legal environment has helped companies with existing products expand faster into the market, attracting capital into a small group of proven companies. Hadick describes this phenomenon as a “consolidation” of capital, especially around stablecoins, exchanges, prediction markets, DeFi, and supporting infrastructure.

Anirudh Pai, partner at Robot Ventures, noted that risk-averse behavior in early-stage investments is not unique to crypto. Citing Bill Gurley of Benchmark, he said many institutional investors are now almost uninterested in deals outside AI, and this sentiment has also spread to crypto investments.

Arianna Simpson, partner at a16z crypto, believes that the deal concentration in 2025 is also industry-specific. Stablecoins became the largest capital attractor as crypto increasingly intersects with fintech, bringing back traditional business models based on transaction fees and volume rather than token economics. She also pointed out that the AI boom has diverted talent and attention away from crypto, contributing to a decline in new deals.

However, some investors see 2025 as a more “balanced” phase. Hadick believes the 2021–early 2022 fundraising boom cycle is unlikely to repeat, and the growth last year was more sustainable.

Capital recovery prospects for early-stage in 2026

Most crypto investors expect early-stage fundraising to improve in 2026, but the recovery will be modest and still far below previous cycles.

Quynh Ho, head of venture investments at GSR, said seed and early-stage activity will rebound, but with much higher standards. She believes investors are now focusing more on market traction and business fundamentals rather than growth stories, even willing to sacrifice upside for clearer exit paths.

Hadick also expects moderate growth in 2026, driven by clearer legal frameworks, M&A activities, and IPOs that will attract new founders. He thinks the appeal of DAT companies has waned, allowing venture capital to refocus on operational businesses. As stablecoin-based applications expand and blockchain usage increases, he believes many funds will gradually regain their fundraising momentum.

Boris Revsin, partner at Tribe Capital, forecasts a slight recovery in both deal volume and invested capital in 2026, but disciplined investing will remain a defining characteristic of the market.

Legal factors are considered a crucial variable. Hoolie Tejwani, head of Coinbase Ventures, said clearer regulations regarding market structure in the US, expected to be enacted this year, could serve as a significant catalyst for the startup ecosystem after the passage of the GENIUS Act.

VC sectors optimistic entering 2026

Stablecoins and payments are the most discussed topics. Investors believe that demand from institutions and clearer regulations are making stablecoin companies increasingly resemble traditional fintech firms. Simpson described stablecoins as “the star of the party” in 2025, as the market returned to simple revenue models based on fees and transaction volume.

Market infrastructure serving institutions is also a major priority, including exchanges, trading platforms, custody, risk management, compliance, and crypto financial products that address operational challenges. These areas benefit directly from institutional capital flows.

Tokenization of real assets continues to attract interest, especially in regions improving liquidity and trading infrastructure. GSR stated they are focusing on infrastructure related to tokenized assets and tools supporting scalability.

Prediction markets are also highly valued. Simpson sees significant growth potential for applications and services in this area as usage increases. However, van Esch believes that after the early funding wave, prediction markets may receive less capital in 2026 due to slower-than-expected adoption.

Tejwani emphasized the concept of “a market for everything,” from prediction markets, perpetual contracts, to real assets, and pointed out that new-generation DeFi, privacy-focused applications, and early intersections of crypto, AI, and robotics present long-term opportunities. He noted that AI increasingly relies on blockchain infrastructure for data, identity, and security, and in the future, machines will transact with each other using internet-native currencies.

Conversely, Robot Ventures and Dragonfly both believe that the crypto–AI sector is overhyped relative to actual progress and may receive less funding next year. Some investors also predict that blockchain infrastructure, especially new Layer 1s, will struggle to raise capital without clear differentiation.

Fundraising prospects via tokens and ICOs

Token sales and ICOs re-emerged in 2025, but investors believe this format cannot fully replace venture capital. Many funds see it as a cyclical trend and are becoming more selective. Token sales can serve as price discovery mechanisms when implemented properly, but market sentiment remains a decisive factor.

Some investors think that a hybrid model combining token sales and VC funding will continue to be popular, while high-quality projects still need VC backing. While supporting on-chain fundraising, van Esch questions whether early liquidity token issuance truly benefits sustainable business building.

Hadick is more cautious, noting that token sales generate more headlines than real value, and in the long run, venture capital will likely remain dominant in funding the strongest companies and protocols.

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