As if emerging from the fire and brimstone of the FTX collapse, crypto-focused venture capital, against all odds and perhaps a little bit of delusion, invested a staggering $4.65 billion in the briskly cold third quarter. This sortie was valiantly second only to a qivvering Q1, where the brave totalled $4.8 billion-an elder tale from yesteryears!
“Despite venturing deep below the dizzying peaks of the 2021-2022 bull market, venture activity remains surprisingly persistent. Interests rove as voraciously as ever across stablecoins, AI, blockchain-backbone of the new digital age-and trading, while pre-seed activities linger with a somber dignity,” noted one Alex Thorn from Galaxy Digital.
And lo, the industry finds itself amidst a lull period, its compass blown by the grim hurricane of FTX’s revelations in November 2022. Yet, in a peculiar twist of fate, the current quarter had 414 deals, with merely seven accounts standing like boulders in a stream, commanding half the funding.
Small Cluster of Deals Waist-Deep in Wealth
Among these titans were Revolut, hoarding $1 billion; Kraken, grasping $500 million; and Erebor, the crypto-focused US bank, clutching $250 million. It seemed the more seasoned beasts-those born of a 2018 era-were embracing the majority of the capital. Meanwhile, the sprightly startups of 2024 buzzed with activity, but found fewer pennies to chase.
“As pre-seed deal whispers fade away in tune with the industry’s maturity, a new epoch dawns. With hallowed legends now joined by new fledglings and legacy players venturing into crypto’s sacred digital halls, the gilded age of naive pre-seed ventures may well be lost to time,” mused Thorn, as if casting a sepulchral prophecy.
Riotous Ventures Liven No More, While ETFs Crying Out for Treasuries
In the flamboyant days of 2017 and 2021, venture capital danced to the rhythmic beats of crypto prices. Yet, now it trudges, unmoved by the siren calls of innovation as costs rise and shifting interests silt the channels of investment.
The stagnation: a ghostly blend of waning attraction to once-booming crypto spectacles like gaming and NFTs, coupled with the roguish advent of AI darlings swiping capital away. Interest rates, nonchalant as ever, dissuade ventures from spreading wings anew.
Spot-based Bitcoin ETPs glintingly beckon to Anchored giants-pension funds, hedge funds-a tempting table where they may sip from crypto’s trails without stepping into the startup fray, Thorn noted darkly.
Yet, amidst the headwinds, whispers of regulatory frescos could kindle anew the flames of investor passion, he prophesied.
US Reigns Supreme in Crypto Ventures
In this quarter, nearly half the US capital opened its coffers for crypto ventures, outshining the UK’s 28% and Singapore’s meager 3.8%. Coincidentally, or perhaps preternaturally, the US, with its 40% share of completed deals, also led this jamboree.
Thorn’s oracle-like insight suggested: Despite America’s erstwhile regulatory cold shoulder, it remains unsurpassed in these pursuits. The patient fingers of Trump’s administration-crypto-friendly whispers on the wind-could tighten this grip still.
“With the GENIUS Act sealed as law, and whispers of a crypto market structure bill echoing through Congressional halls, the traditional warriors of US finance stand at the ready to charge into this brave new frontier,” concluded Thorn with an air of guarded optimism.
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2025-11-25 09:21