Major deals from Revolut, Kraken, and Erebor dominate inflows as institutional appetite slowly returns to blockchain startups
Crypto venture capital is showing renewed signs of strength, with $4.65 billion poured into blockchain and digital asset startups in Q3 — the second-highest level since the collapse of FTX in late 2022. The rebound, highlighted in a new market report, signals that investor confidence is slowly returning even as the industry continues to mature and shift away from early-stage speculation.
Concentration of Capital in a Few Mega Deals
According to industry research, Q3 saw 414 VC deals, but only seven accounted for half of all capital raised.
Revolut led the quarter with a massive $1 billion round, followed by Kraken with $500 million and Erebor Bank with $250 million.
Analysts say this heavy concentration reflects a market where established companies — particularly those founded before 2018 — are attracting the bulk of institutional dollars.
Alex Thorn, head of research at Galaxy Digital, noted:
“Sectors like stablecoins, AI integrations, blockchain infrastructure, and trading tools continue to draw deals and dollars. Venture activity remains active and healthy overall.”
Shift Away From Early-Stage Crypto Funding
One of the most notable trends this quarter is the decline in pre-seed investments.
Thorn emphasized that the ‘golden era’ of early pre-seed crypto funding may now be over, citing industry maturation and competition from fast-growing AI startups.
He added that the VC stagnation seen over the past two years stems from multiple pressures, including:
- Reduced excitement around NFTs, gaming, and Web3
- High interest rates limiting appetite for speculative investments
- Investors choosing spot Bitcoin ETPs and crypto treasury products instead of early-stage startups
Global Breakdown: US Leads Capital Flows
The United States dominated once again, capturing 47% of all capital deployed and 40% of total deals.
The UK followed with 28% of capital, while Singapore accounted for just 3.8%.
Despite regulatory hurdles in previous years, the US remains the center of crypto venture activity.
Thorn expects this dominance to grow under a friendlier federal environment, supported by the newly passed GENIUS Act and ongoing efforts to establish clearer crypto market structure laws.
Though VC activity still trails the 2021–2022 bull cycle, the sharp rebound in Q3 signals a shift in sentiment. Analysts believe regulatory clarity, improving macro conditions, and increasing institutional participation may continue to boost blockchain startup funding into 2025.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.