The number of monthly crypto VC deals fell to around 50 in May 2026, the lowest level since the period before the 2021 boom cycle. However, the invested dollar volume remains elevated, because mega-rounds such as Kalshi's 1 billion USD Series F pull the statistics upward.
Venture capitalists (VCs) deploy risk capital that flows into young companies betting on blockchain infrastructure, decentralized protocols or crypto-native financial services. Deal count and capital volume are also regarded as the two most important metrics for the health of the sector, and they currently move in opposite directions. The last comparable low point dated back to the period before the 2021 boom cycle. In the first quarter of 2026, according to Galaxy Digital, 4 billion USD flowed across 355 deals, a decline of 50 percent in capital and 16 percent in deals compared with the previous quarter. At the same time, only 600 crypto VCs remained active, the lowest level in four years. Furthermore, just eight new funds were added, as few as last seen in the third quarter of 2020.
Fewer deals, larger tickets: the divide in the crypto VC market
With around 50 transactions, May 2026 marked the lowest monthly figure in years. Already in April, only 62 deals worth a total of 660 million USD had materialized, a decline of roughly 75 percent compared with March, which saw 2,600 million USD across 84 deals. The historical reference point therefore lies before the 2021 cycle, when monthly deal counts ran well above today's level. The market last recorded a cycle peak in deal activity in 2024.
Deal sizes, however, send the opposite signal. The median crypto VC deal climbed to more than 4.5 million USD in the first quarter of 2026, reaching a new all-time high. Moreover, the average deal size rose in parallel to 35.9 million USD, an increase of 76 percent compared with the previous quarter. Capital is thus concentrating in fewer but considerably larger transactions.
The shift becomes especially striking when comparing early-stage and late-stage financing. Late-stage deals of Series C and higher absorbed 28.4 percent of total capital in the first quarter, an increase of 320 percent compared with the previous quarter. Pre-seed investments, by contrast, collapsed by 38.1 percent, and the entire early-stage segment accounted for just 5.2 percent of the volume. Capital is therefore flowing away from early bets and toward companies with a proven business model. As a result, the industry is undergoing a maturation process in which capital providers move from many seed experiments to concentrated bets on established business models.
Subscribe to our newsletter
The best articles of the week, directly delivered into your mailbox.
Kalshi and the distortion from billion-dollar rounds
A single deal illustrates the new logic. Kalshi, a prediction exchange on which users can bet on the outcome of future events, closed a Series F round of 1 billion USD in May 2026. The valuation reached 22 billion USD. Coatue acted as lead investor, and Sequoia Capital, Andreessen Horowitz, Paradigm, IVP, Morgan Stanley and ARK Invest participated.
The platform's valuation had previously doubled within just five months, from 11 billion USD at the Series E in late 2025 to 22 billion USD now. The rise was steep: in mid-2025, the valuation stood at 2 billion USD with 185 million USD in fresh capital, then at 5 billion USD in October. Behind the jump stands a rapidly growing business. Specifically, Kalshi reports annualized revenue of more than 1,500 million USD on a trading volume of 178 billion USD. The platform thereby holds around 90 percent of US activity in prediction markets. Moreover, the lineup of investors from classic Wall Street houses and crypto funds signals a growing convergence of TradFi and crypto.
Such a mega-round distorts the aggregate picture considerably. The trading, exchange, investing and lending sector led the first quarter with 2,600 million USD, accounting for 58 percent of total crypto VC capital. In addition, the payments sector reached 2,670 million USD, driven above all by the BVNK acquisition of 1,800 million USD. Individual large financings therefore keep the dollar volume high, while the breadth of the market continues to shrink.
Who still invests and who is leaving the market
The investor universe is shrinking measurably. In the first quarter of 2026, only 600 crypto VCs remained active, the lowest level in twelve quarters. Additionally, just eight new funds were launched with a combined total of roughly 1,100 million USD, as few new launches as last seen in the third quarter of 2020. Both figures consequently point to an ongoing consolidation among capital providers.
The remaining activity concentrates on a few names. Coinbase Ventures was the most active investor of the quarter with twelve deals, while a16z, Castle Island, Big Brain Holdings and Galaxy Digital each reached five deals. Sequoia, Founders Fund, Bain Capital and the Alibaba Group likewise took part in individual rounds. Geographically, the US clearly dominates: more than 70 percent of invested capital and 43.5 percent of all deals went to the US market, followed by Bahrain and Singapore by capital and the United Kingdom by deal count.
Behind the concentration lies a shift in substance. The remaining capital increasingly moves into regulated infrastructure, namely stablecoin payments, custody, compliance and tokenization. These areas fit the structural policy framework taking shape in the US and the EU, and therefore attract a disproportionate share of funds. Broader infrastructure and financial services deals, by contrast, moved close to their multi-year lows.
AI absorbs the venture capital that the crypto industry is losing
The decline in the crypto segment is taking place against the backdrop of a global venture boom. In the first quarter of 2026, global VC volume reached an absolute all-time high of 297 billion USD. However, the largest share of this flowed into artificial intelligence: the AI share stood at 239 billion USD, or 81 percent of global VC, after 55 percent in the same quarter a year earlier. Four mega-rounds alone absorbed 64 percent of total global quarterly capital: OpenAI with 120 billion USD, Anthropic with 30 billion USD, xAI with 20 billion USD and Waymo with 16 billion USD.
Crypto VC is consequently losing ground both in absolute and relative terms. On the basis of the first quarter, the projection for 2026 yields around 16 billion USD, thus well below the roughly 20 billion USD of 2025. Notably, the historical relationship between the Bitcoin price and venture activity has weakened, according to Galaxy Digital. Bitcoin reached new highs in late 2025, yet this time the capital did not follow into the early-stage market. Whereas earlier cycles in 2017 and 2021 saw a rising Bitcoin price almost automatically followed by a wave of early financing, this reaction has recently been absent.
Within the crypto VC universe, capital is likewise shifting toward AI. In 2025, a growing share already moved in this direction, namely 40 cents per invested dollar into AI crypto hybrid projects, compared with 18 cents the year before. These include decentralized compute marketplaces as well as on-chain agent infrastructure around projects such as Bittensor, Akash and IO.net.
