As large amounts of capital rapidly leave the crypto market in early 2026 and investor sentiment is very fearful, the investment decisions of venture capital firms have become important signals. These decisions help retail investors identify sectors that may still have potential during a bear market.
New reports indicate that the environment in the crypto market has changed. Sectors receiving venture capital have also changed.
VCs invest over 2 billion USD in crypto in early 2026
Data from CryptoRank shows that venture capital firms have invested over 2 billion USD in crypto projects since the beginning of the year. On average, inflows have been over 400 million USD each week.
Several large deals stand out. Rain raised 250 million USD to build stable payment systems with stablecoins for businesses. BitGo raised 212.8 million USD through its IPO, strengthening their role as a custody and security provider for large investors.
BlackOpal also raised 200 million USD for its GemStone product, which is an investment tool backed by tokenized Brazilian credit card receivables.
In addition to these deals, Ripple invested 150 million USD in the trading platform LMAX. The investment supports the introduction of RLUSD as a key collateral in institutional trading solutions. Tether also made a strategic investment of 150 million USD in Gold.com, which opens global access to both tokenized and physical gold.
Analyst Milk Road notes that capital is no longer flowing to Layer 1 blockchains, meme coins, or AI integrations. Now stablecoin infrastructure, custody solutions, and tokenization of real-world assets (RWA) dominate the investments.
Market data confirms this change. Since the beginning of the year, the value of the entire cryptocurrency market has decreased by about 1 trillion USD. Meanwhile, the value of the stablecoin market has been over 300 billion USD. The total value of tokenized RWA has reached record levels of over 24 billion USD.
What does the change in VC interest mean?
Ryan Kim, founding partner at Hashed, says that venture capitalists' expectations have now completely changed. The change reflects a new standard for investments in the industry.
In 2021, investors focused on token economics, community, and narrative-driven projects. By 2026, venture capitalists are prioritizing real revenues, regulatory advantages, and institutional clients.
“Do you see what’s missing? No L1s. No DEXs. No ‘community-driven’ at all. Every USD went to infrastructure and regulatory compliance,” says Ryan Kim.
The biggest deals here concern companies building infrastructure, not projects with their own tokens aimed at price appreciation. Therefore, the market now lacks the components that previously created hype and FOMO.
“Not on speculation. Not on hype cycles. They are looking at the fundamentals, the connections, and the compliance layers,” says analyst Milk Road.
But analyst Lukas (Miya) views the development more negatively. He believes that crypto venture capital is on the verge of collapse, pointing to a sharp decline in commitments from investors.
He highlights several warning signs. Well-known companies like Mechanism and Tangent have left crypto. Many other companies are quietly unwinding their positions.
It may still be too early to say that crypto venture capital is dead, as over 2 billion USD has flowed into the sector since the beginning of the year. At least the changes show that crypto is increasingly integrating with the traditional finance world. This may be a sign that the industry is maturing in the long term.