Crypto venture capital is moving into a much narrower market. Tiger Research, drawing on RootData records for 9,416 investment deals logged from 2018 through the first half of 2026, said H1 2026 funding reached $13.3 billion, nearly equal to the full-year 2024 total of $13.2 billion, while the number of rounds fell to 435.
That deal count was down 78% from the 2022 peak of 1,978, according to the report. In Tiger Research's reading, capital is no longer being scattered across large numbers of early token projects. It is being concentrated in a smaller set of companies that can show a workable business model, auditable revenue, and regulatory licenses.
Core findings point to a concentrated market
The report highlights several shifts at once. Funding volume in H1 2026 climbed to $13.3 billion, roughly in line with 2024's $13.2 billion, but the market produced only 435 rounds. Tiger Research said the industry has effectively split into two camps: a small group of large crypto-native venture firms that focus on leading rounds, and exchange-backed investors that compete through liquidity and platform support.
Gaming was one of the sharpest examples of the reset. The number of gaming rounds fell from 141 in 2024 to just 5 in H1 2026, a 96% drop. The report also said capital entering the payments and stablecoin segment, as well as the centralized exchange segment, was driven by mergers and acquisitions. Traditional financial institutions appeared in 54.5% of all investment deals in H1 2026.
The 2021 model was speed, volume, and diversification
Tiger Research described 2021 as the clearest expression of the previous cycle's venture strategy. Investors completed 1,750 deals that year, including seed rounds, and competition centered on speed. AU21 Capital alone averaged more than 13 deals a month.
Investment decisions at the time were often reduced to simple screens such as token generation event schedules and tokenomics. Because token issuance itself could create returns before any real product was built, venture firms spread money across dozens or even hundreds of projects regardless of valuation. Fast execution mattered more than exhaustive due diligence. New rounds were completed quickly, and firms that missed one round often chased the next at a higher valuation. Tiger Research said many firms built around that model did not survive the bear market that followed, while those that did changed strategy at a basic level.
Which venture firms remained active
Lead investing still belongs to the largest players
The report first examined lead rounds, using them as a measure of which firms continued to shape major financings. Some venture firms remain active lead investors today, while others have disappeared or only appeared recently. Tiger Research said lead investing has always depended on scale, capital, and reputation, which is why many of the firms that led major rounds in earlier years still sit near the top today.
Crypto-native firms and exchange-backed investors are diverging
From 2024 through H1 2026, the latest data showed large crypto-native venture firms and established institutions concentrating their resources on lead rounds and becoming more involved in each individual deal. Their model shifted toward fewer total investments, higher due-diligence thresholds, and stronger governance influence, including board seats.
The picture looked different outside lead investing. Among the 15 most active venture investors by participation count from 2024 through H1 2026, exchange-affiliated firms made up a large share. Coinbase Ventures ranked first with 140 deals, OKX Ventures ranked second with 94, and YZi Labs ranked third with 92. The report noted that YZi Labs is the organization formed after Binance Labs changed its name in January 2025.
HashKey Capital, ranked seventh, is the venture arm of HashKey Exchange, while Mirana Ventures, ranked fourteenth, is Bybit's venture arm. Tiger Research said five major exchanges appeared in the top 15 through their venture units alone. By contrast, firms known more for lead investing, such as Polychain and Pantera Capital, ranked lower on total participation count.
The report said exchange-linked investors secured a central role in funding rounds by offering liquidity and marketing support through their platforms. Mid-sized venture firms without a clear defensive edge, whether through scale, brand, or exchange-level liquidity support, are being pushed out quickly under capital pressure and failed exits.
The firms leaving the market
Tiger Research said many venture firms that built broad portfolios during the last bull cycle through rapid token monetization have now lost their influence. Deal activity at AU21 Capital, LD Capital, and Shima Capital fell by as much as 98.9%.
The report tied that decline to two changes. First, strategies built on chasing short-term narratives stopped working once the market entered a prolonged downturn and regulation tightened. Second, overall capital flows shifted toward more mature companies, leaving far fewer new projects in the market that needed early funding. In the report's framing, the opportunity set that sustained those firms has largely disappeared.
Funding rounds now favor mature companies over seed bets
Seed activity has fallen sharply
There were 81 seed-stage deals in H1 2026, down 88% from 694 in 2022. Seed rounds also shrank as a share of all deals, from 35.3% in 2022 to 18.7% in H1 2026.
Tiger Research said the drop can be read in two ways at once. Investors have become more reluctant to back unproven early-stage projects, and there are simply fewer new projects in the market seeking seed funding. The metric captures both contraction and maturation.
Capital has moved to later stages
Measured by capital allocation, rounds from Series A onward now account for 75.2% of total investment. Seed funding briefly represented a majority share during the 2023 bear market, but once the market recovered, capital shifted back toward better-capitalized companies.
In H1 2026, total Series A funding came to $745 million, above the $423 million raised across all seed-stage financings, making Series A the largest category by round size. Average deal values rose step by step across stages: $5.4 million for seed, $22.4 million for Series A, $127 million for Series C, and $202 million for Series E. The report said that although sample sizes narrow in later rounds, companies that reach those stages typically do so with higher revenue and valuation, which pushes up the capital involved in each round.
Market-wide data shows volume holding up while deal count falls
Capital and deal numbers have split apart
Total capital inflow reached $13.3 billion in H1 2026, while the 435 deals recorded amounted to only 22% of the 1,978 deals logged in 2022, the market's busiest year by deal count. From 2024 to 2026, Tiger Research said, total capital stayed flat or moved higher even as it was compressed into fewer transactions.
Small diversified bets aimed at short-term token liquidity events have declined, while large direct checks from traditional financial institutions have increased. The report said institutions are judging targets less on listing schedules or market narratives and more on auditable revenue structures and necessary regulatory licenses.
There were 32 deals of $100 million or more in H1 2026, equal to 7.4% of all transactions, up from 1.1% in 2024. Average deal size rose from $11.7 million in 2024 to $47.4 million in H1 2026. Tiger Research said the increase came from both directions: more large deals were getting done, and small deals, including seed rounds, were disappearing. As a result, a small group of surviving projects now dominates the market.
Traditional finance remains deeply involved
The share of investment deals involving traditional financial institutions rose from 29.2% in 2018 and first crossed the majority threshold in 2021 at 53.9%. Participation slipped to 45.2% in 2023, recovered to 54.4% in 2024, eased to 50.9% in 2025, and then returned to 54.5% in H1 2026.
Tiger Research pointed to a $355 million funding round for Digital Asset, the developer of Canton Network, led by Andreessen Horowitz's a16z. Core institutional participants included BNP Paribas, HSBC, S&P Global, and Hanwha Investment & Securities, all investing directly rather than through venture subsidiaries.
The report said the market has moved away from a structure in which most money entered at the earliest stage. As crypto VC firms expanded and traditional investors came in, more capital began flowing toward companies that had already reached a certain level of maturity.
Sectors: infrastructure loses share as payments, exchanges, and prediction markets rise
Tiger Research used 2024 as the baseline year for sector comparison because spot Bitcoin ETF approval and a more favorable regulatory environment produced the first clear sector-level capital flows since the bear market.
In 2024, infrastructure accounted for 50.9% of total invested capital. By H1 2026, that share had dropped to 14.8%. Payments and stablecoins moved to the front with 25.3%, centralized exchanges followed at 18.2%, and prediction markets reached 17.5%.
The report said this shows that blockchain infrastructure is no longer mainly being valued as a standalone investment category. Instead, it is increasingly being used as a practical operating layer for institutional businesses. Examples cited included Robinhood running its own layer on Arbitrum and Securitize using Solana and Avalanche as settlement layers around its New York Stock Exchange listing. In Tiger Research's view, the market's core demand has shifted from building new protocol infrastructure from scratch to operating real financial services on top of existing infrastructure layers.
Gaming, NFTs, and social projects fell back hard
Gaming, NFT, and social and entertainment projects all saw steep drops in deal count. Gaming fell from 141 deals to 5, NFTs from 27 to 2, and social and entertainment from 74 to 11.
Funding moved in the same direction. Gaming capital dropped from $758.6 million to $44.8 million, NFT funding fell from $114.9 million to $14.7 million, and social and entertainment declined from $512.1 million to $70.1 million.
Gaming saw the largest retreat of the three. Tiger Research said early GameFi models tied gameplay to token rewards and often leaned too heavily on token issuance as a source of financial return instead of building sustainable game loops. Once new-user growth slowed, the sector fell into what the report called a death spiral, where falling token values and user outflows reinforced one another. Traffic data, once treated as a key diligence metric, lost credibility, and capital effectively stopped flowing into the category.
DeFi became quieter, but not small
DeFi deal count fell 71%, but total investment declined by only about 34%. Average deal size rose from $4.5 million in 2024 to $10.4 million in H1 2026, showing that capital was being concentrated into fewer, larger rounds.
The report said the main driver was Morpho's token sale to institutions and investment firms. Morpho, which uses a modular lending protocol to open DeFi vault markets to institutions, raised $175 million on June 9, 2026, in a token round led by a16z crypto, Paradigm, and Ribbit Capital. That single round represented 17.7% of all DeFi investment in H1 2026.
In practical terms, Tiger Research said, DeFi has moved away from broad ecosystem-wide funding and toward a smaller set of protocols that the market already sees as proven.
Payments and stablecoins grew fastest, with M&A doing most of the work
The payments and stablecoin segment accelerated on a monthly basis, and total investment jumped from $143.9 million to $2.85 billion in H1 2026. Tiger Research said that surge was driven largely by a few large acquisitions.
The biggest transaction in the sector during the period was Mastercard's $1.8 billion acquisition of BVNK in March. The second was Payward, Kraken's parent company, acquiring Reap for $600 million in May. Those two deals alone made up about 84% of total investment in the segment during H1 2026. Cross-border payments and crypto card issuers also continued to raise funding, including Rain at $250 million and KAST at $80 million.
The report said recent large acquisitions show that traditional payment companies and major Web3 firms have moved beyond simple partnerships and are now buying and directly controlling stablecoin infrastructure. Stripe was presented as the clearest example. After acquiring Bridge in October 2024, Stripe worked with Paradigm to build Tempo, a blockchain designed for stablecoin payments, and launched its mainnet in March 2026. In June that year, Bridge co-founder Zach Abrams became interim head of the entity operating Open USD, or OUSD, a global consortium stablecoin project with more than 140 participating companies.
Tiger Research said OUSD adopted Bridge, which Stripe acquired and continued to develop, along with Tempo, which Stripe is building, as its core initial infrastructure. In the report's framing, competition in stablecoin infrastructure has moved beyond company-level acquisitions and into a race to set standards for the broader market.
Centralized exchanges are being reshuffled through acquisitions
The centralized exchange, or CEX, segment rose from 3.0% of total investment in 2024 to 18.2% in H1 2026. Tiger Research said that gain should not be read simply as traditional venture expansion into new exchanges, because M&A represented 75.5% of all CEX investment recorded from 2024 through H1 2026. That share climbed from 58.8% in 2024 to 78.9% in 2025.
Total capital inflow was below the prior year's $19.4 billion peak, when large acquisitions were heavily concentrated, but it still stood at more than six times the 2024 level of $340 million. Deal count did not slow either. The market logged 23 CEX transactions in H1 2026, or 3.8 a month, faster than 2.8 a month in 2024 and 3.0 a month in 2025.
The report described the segment as an industry reshuffle centered on a small number of major operators. The largest announced transaction in the period was Naver's acquisition of a stake in Dunamu, which remains under regulatory review. It was followed by Coinbase's $2.9 billion acquisition of Deribit and Kraken's $1.5 billion acquisition of NinjaTrader.
MGX's $2 billion strategic investment in Binance fit the same pattern, according to the report. At the same time, venture arms of existing large exchanges, including OKX Ventures and HashKey Capital, have become more active in financing rounds and acquisitions tied to their own ecosystems. CEX participants are increasingly acting as both targets and strategic investors.
Prediction markets became a regulated destination for large checks
Tiger Research described prediction markets as a sector that provides liquidity around real-world macro indicators such as economic data, elections, and policy decisions. It said the trigger for the sector's expansion was the Commodity Futures Trading Commission's formal regulatory approval in May 2025, which opened the way for large allocations from hedge funds and asset managers.
Kalshi's cumulative trading volume exceeded $100 billion in June 2026. The company had already raised $1 billion in December 2025 in a round led by Paradigm, then followed with another $1 billion round led by Coatue.
Polymarket also brought in funding from Intercontinental Exchange, or ICE, a major traditional exchange operator. In October 2025, ICE committed up to $2 billion and deployed $1 billion. It added another $600 million in March 2026, bringing the total to about $1.6 billion.
The report said prediction markets are not becoming a field crowded with many competing startups. Instead, they are developing into a structure in which traditional financial institutions and top-tier capital repeatedly fund the first two participants to win regulatory approval.
Custody stayed quieter, but grew sharply
Funding for custody increased fifteenfold, from $20.4 million in 2024 to $317.1 million in H1 2026. Anchorage raised a $100 million strategic round in H1 2026, which meant the company alone accounted for roughly one-third of all investment in the segment during the period.
The report said compliant custody infrastructure is critical for institutional asset managers that want to hold crypto assets directly. Growth in the segment has tracked rising institutional demand for asset-management and crypto custody services.
Tiger Research added that the sectors showing stable capital inflows all share a common feature: the underlying demand is being created by institutions entering the market and needing working infrastructure.
From betting on narratives to controlling infrastructure
Tiger Research concluded that crypto capital is shifting away from spreading small early bets and toward taking ownership stakes in infrastructure and protocols. Before spot Bitcoin ETF approval and the regulatory improvement seen in 2024, the market was dominated by small narrative-driven bets spread across many projects. The report said that strategy ended in the collapse of gaming and NFT funding and in the exit of venture firms that kept relying on it.
Now, in the report's view, the goal is not short-term exposure but long-term control over targets and on-chain infrastructure. Capital is being concentrated into a small set of companies that already have auditable revenue structures and regulatory licenses, or into direct acquisitions that secure control over the infrastructure itself.
The report also said that early-stage venture investment once served as a market signal. Backing from a well-known VC could lift token prices or draw retail traders into early participation. Structural capital deployed through infrastructure acquisitions and license-driven deals does not work that way. Tiger Research said the weaker retail response to VC funding news reflects that deeper change in the market's capital structure.