Now that a lot of capital is flowing out of the crypto market at the beginning of 2026 and the sentiment of investors remains at extremely fearful levels, the decisions of venture capitalists are becoming increasingly important. These choices help private investors find sectors that may still have potential in a bear market.
Recent reports show that the environment in the crypto market has changed. The sectors that are now attracting venture capital have also changed.
VCs are investing over $2 billion in crypto beginning 2026
Data from CryptoRank shows that venture capital firms have invested more than $2 billion in crypto projects since the beginning of the year. On average, weekly inflows are above $400 million.
Several large deals stand out. Rain has raised $250 million to build a stablecoin payment infrastructure for businesses. BitGo raised $212.8 million through an IPO. This strengthens BitGo's role as a custodian and provider of security for institutional clients.
BlackOpal also raised $200 million for the GemStone product. This is an investment instrument backed by tokenized Brazilian credit card receivables.
In addition to these deals, Ripple has invested $150 million in trading platform LMAX. With this, they want to integrate RLUSD as important collateral within institutional trading infrastructure. Tether also made a strategic investment of $150 million in Gold.com, allowing more people worldwide to access both tokenized and physical gold.
Analyst Milk Road states that no capital is flowing into Layer 1 blockchains, meme coins, or AI integrations. Instead, stablecoin infrastructure, custody solutions, and real-world asset (RWA) tokenization are now receiving the most investments.
Market data confirms this shift. Since the beginning of the year, the total crypto market capitalization has decreased by about $1 trillion. In contrast, the stablecoin market capitalization remained above $300 billion. The total value of tokenized RWAs reached an all-time high of over $24 billion.
What does the shift in VC appetite say?
Ryan Kim, founding partner at Hashed, states that VCs' expectations have fundamentally changed. This shift shows a new investment standard for the sector.
In 2021, investors focused on tokenomics, community growth, and projects with a good story. In 2026, VCs primarily prefer real revenue, regulatory advantages, and institutional clients.
"Do you see what’s missing? No L1s. No DEXs. No 'community-driven' projects. Every dollar went to infrastructure and compliance," said Ryan Kim.
The largest deals mentioned above involve companies building infrastructure, rather than projects primarily focused on price speculation via tokens. As a result, the market currently lacks the hype and FOMO that was previously present.
"Not on speculation. Not on hype cycles. They are looking at infrastructure, connections, and compliance layers," said analyst Milk Road.
Nevertheless, analyst Lukas (Miya) has a more negative view. He believes that crypto venture capital is collapsing, as investor commitments are declining sharply and for a long time.
He points to various warning signs. Well-known names like Mechanism and Tangent are exiting crypto. Many companies are quietly scaling back their positions.
However, it is likely still too early to say that crypto VC has collapsed, as more than $2 billion has flowed into the sector since the beginning of this year. These changes certainly show that crypto is becoming increasingly intertwined with the traditional financial system, which may also indicate maturation in the long term.