Crypto venture capital is being deployed in a very different way than it was a few years ago. A new report from Tiger Research, using RootData records covering 9,416 investment deals from 2018 through the first half of 2026, argues that capital is now concentrating around a narrower set of sectors and companies rather than spreading widely across early-stage token projects.
The top-line figures capture that change. Capital inflows reached $13.3 billion in H1 2026, roughly level with the $13.2 billion raised in all of 2024. Deal count moved in the opposite direction. Funding rounds fell to 435, down 78% from the 2022 peak of 1,978 rounds.
Tiger Research highlighted several defining features of the current market: large crypto-native venture firms are focusing on lead investments, exchange-affiliated venture arms are competing through liquidity and platform support, mid-sized investors without a clear edge are being pushed out, gaming rounds have collapsed from 141 in 2024 to just five in H1 2026, capital flowing into payments and stablecoins and into centralized exchanges is being driven entirely by M&A, and traditional financial institutions appeared in 54.5% of all recorded investment transactions in H1 2026.
2021 was built on speed and diversification
The report describes 2021 as a market defined by speed and portfolio breadth. Investors completed 1,750 deals that year, including seed rounds. Competition to get into rounds quickly was intense. AU21 Capital alone averaged more than 13 deals a month, according to the report.
Investment decisions were often reduced to a few simple inputs, especially token generation event timelines and tokenomics. Because returns could be generated from token issuance without a project first building a real product, venture firms often adopted what the report calls a “spray and pray” model, spreading capital across dozens or even hundreds of projects without putting much weight on valuation discipline.
Execution mattered more than exhaustive due diligence. New rounds could close almost immediately, and a VC that missed one round would often chase the next one at a higher valuation. Tiger Research says that fear-of-missing-out pattern repeated across the industry. Many of the firms built around it did not survive the bear market that followed. Those that did survive changed their playbook at a structural level.
The VC firms that remained, and how the market split
Lead investing still matters, but only a few firms can do it consistently
The first lens in the report is lead-investor activity, historically dominated by large VC firms. Some of those firms are still active lead investors today. Others disappeared altogether or only resurfaced recently.
Lead investing has always required a level of reputation and capital that only large firms typically possess. For that reason, Tiger Research argues that the firms that led major rounds in the past and still rank near the top today have demonstrated resilience. Most of them remain in the top 10.
Large crypto VCs and exchange venture arms now play different roles
Looking at data from 2024 through H1 2026, the report says crypto-native VCs and established large institutions are concentrating their resources on leading rounds and becoming more involved in each deal they back. Their business model has shifted toward fewer transactions, higher due-diligence standards, and stronger influence over governance, including board seats.
A different pattern shows up outside lead investing. In the ranking of the 15 most active firms by total round participation from 2024 through H1 2026, exchange-affiliated investors accounted for a large share. Their appetite for follow-on participation was much higher than their appetite for leading rounds.
@cbventures ranked first with 140 deals, followed by @OKX_Ventures with 94 and @yzilabs with 92. The report notes that @yzilabs is the entity created after Binance Labs rebranded in January 2025.
At No. 7 was @HashKey_Capital, the venture arm of Hong Kong exchange @HashKeyExchange. At No. 14 was @mirana, the venture arm of @Bybit_Official. In total, five major exchange venture units made the top 15 on participation alone. By contrast, large firms known for lead investing, including @polychain and @PanteraCapital, ranked lower on this broader participation measure.
Tiger Research says CEX-affiliated funds have turned platform liquidity and marketing support into a competitive advantage, making them core participants in primary rounds. Mid-sized VCs without a defensible edge, whether through scale, brand, or exchange-level liquidity support, are being pushed out under the combined weight of capital pressure and failed exits.
The end of the spray-and-pray firms
The report says many of the venture firms that built large portfolios in the last bull market by relying on quick token exits have effectively disappeared from the market. @AU21Capital, LD Capital, and @shimacapital saw their deal count drop by 98.9%, losing practical influence in the process.
Once the market moved into a long bear phase and tighter regulation, strategies tied to chasing short-term narratives stopped working. Tiger Research argues that the main reason for their failure was a lack of real differentiation. It also points to a broader shift: capital has moved toward projects with some maturity, while genuinely new projects in need of early funding have become scarce. The opportunity set those firms depended on is no longer there in the same way.
Rounds changed too: investors want the fruit, not the seed
Seed activity has broken down
There were 81 seed-stage deals in H1 2026, down 88% from 694 in 2022. The report presents that as a clear sign of investor aversion to unproven business models and higher-risk early-stage projects.
The shift is visible in the mix of rounds as well. Seed accounted for 35.3% of all transactions in 2022. By H1 2026, the share had fallen to 18.7%. Tiger Research says this reflects both risk avoidance and an absolute shortage of early projects seeking seed capital. In its reading, the metric captures both contraction and maturation at the same time.
Capital is moving to later stages
From a capital-allocation perspective, Series A and later rounds now account for 75.2% of total investment. During the 2023 bear market, seed briefly made up the majority of investment share, but capital quickly rotated back into better-funded companies as the market recovered.
In H1 2026, total Series A funding reached $745 million, overtaking all seed-stage funding combined at $423 million and becoming the largest category by round type.
The average deal size rose sharply by stage:
- Seed: $5.4 million
- Series A: $22.4 million
- Series C: $127 million
- Series E: $202 million
The report notes that sample sizes get smaller at later stages, but the companies that reach them typically have stronger revenue and valuation trajectories, which naturally leads to larger checks.
The broad market: more money, fewer deals
Capital and volume are no longer moving together
Total inflows reached $13.3 billion in H1 2026, while the 435 recorded deals represented just 22% of the 1,978 deals logged in 2022, the market’s peak year by transaction count. From 2024 to 2026, Tiger Research says total capital held steady or rose even as that money was concentrated into fewer transactions.
Small, diversified bets tied to token liquidity events have faded. Large direct investments from traditional financial institutions have increased. The report says these institutions are screening for auditable revenue structures and the licenses needed to operate, not token listing timelines or narrative momentum.
There were 32 deals at or above $100 million in H1 2026, equal to 7.4% of all transactions, up from 1.1% in 2024. Over the same period, average deal size roughly quadrupled from $11.7 million in 2024 to $47.4 million in H1 2026.
Tiger Research attributes the rising share of very large rounds to two things at once: more large transactions, and the disappearance of small ones, including seed deals. As smaller checks vanish, the surviving projects take a larger share of capital, and the big rounds stand out more in relative terms.
Traditional finance is directly entering venture rounds
The share of recorded investment deals involving traditional financial institutions stood at 29.2% in 2018. It first moved above half in 2021, reaching 53.9%. Participation then slipped to 45.2% in 2023, recovered to 54.4% in 2024, eased to 50.9% in 2025, and rose again to 54.5% in H1 2026. Since crossing the 50% mark in 2021, participation has remained close to that level.
One example cited in the report is the $355 million round led by @a16z in @digitalasset, the developer of @CantonNetwork. Core institutional participants included BNP Paribas, HSBC, S&P Global, and Hanwha Investment & Securities, and they invested directly rather than through venture subsidiaries.
Tiger Research says the market used to rely more heavily on the earliest-stage entry point. Now, as crypto venture firms have matured and traditional investors have stepped in, more capital is being directed toward companies that already show a certain level of operating maturity.
Sector rotation: infrastructure fell back, payments, CEXs, and prediction markets moved up
The report uses 2024 as a baseline for sector comparison, arguing that the approval of spot Bitcoin ETFs and a more favorable regulatory environment created the first clear sector-level capital flows since the bear market.
Infrastructure took 50.9% of total invested capital in 2024, the year spot Bitcoin ETFs were approved. By H1 2026, that share had fallen to 14.8%. Payments and stablecoins, centralized exchanges, and prediction markets moved into the lead with shares of 25.3%, 18.2%, and 17.5%, respectively.
In Tiger Research’s view, this points to a change in the character of blockchain infrastructure. It is no longer primarily being funded as a standalone target. It is being used as a practical platform for institutional business. The report points to @RobinhoodApp running its own layer on Arbitrum and Securitize using Solana and Avalanche as settlement layers around its listing on the New York Stock Exchange. Capital demand is no longer centered on building new protocol infrastructure from scratch. It is centered on operating real financial services on top of existing infrastructure.
Gaming, NFTs, and social were the biggest losers
The report identifies three sectors where both deal volume and capital fell sharply:
- Gaming: from 141 deals to 5, and from $758.6 million to $44.8 million
- NFTs: from 27 deals to 2, and from $114.9 million to $14.7 million
- Social and entertainment: from 74 deals to 11, and from $512.1 million to $70.1 million
Gaming saw the deepest drop. Tiger Research says the early GameFi model tied gameplay too heavily to token rewards and depended too much on token issuance for financial returns instead of sustainable game design. Once new user growth slowed, the model fell into what the report calls a death spiral, with falling token value and user attrition reinforcing each other. Traffic metrics that once served as key due-diligence signals lost credibility, and capital into the sector was largely cut off.
DeFi kept moving, but with heavier concentration
DeFi deal count fell 71%, but total investment was down only about 34%. Average deal size rose from $4.5 million in 2024 to $10.4 million in H1 2026, a sign that capital is clustering in a smaller number of larger rounds.
The report says a major driver was Morpho’s token sale round aimed at institutions and investment firms. On June 9, 2026, @Morpho raised $175 million in a round led by @a16zcrypto, @paradigm, and @RibbitCapital. Tiger Research says the protocol uses modular lending to open DeFi vault markets to institutions and reset DeFi risk standards. That single round accounted for 17.7% of all DeFi funding in H1 2026.
Its conclusion is that DeFi capital is no longer spread across broad ecosystem expansion. It is moving toward a small set of protocols that the market has already validated.
Payments and stablecoins became the fastest-growing segment
The payments and stablecoin sector kept accelerating by transaction count, while total capital increased by roughly 20 times, from $143.9 million to $2.85 billion in H1 2026. A large share of that jump came from a small number of M&A transactions.
The report lists two in particular:
- Mastercard acquired BVNK for $1.8 billion in March.
- Payward, Kraken’s parent company, acquired Reap for $600 million in May.
Those two transactions alone made up about 84% of total capital invested in the sector during H1 2026. Cross-border payments and crypto card issuers also kept raising money, including @raincards at $250 million and @KASTxyz at $80 million.
Tiger Research says these large acquisitions show traditional payment companies and major Web3 institutions moving to directly own and control stablecoin infrastructure. Stripe is presented as the clearest case. The report traces that strategy back to Stripe’s October 2024 acquisition of Bridge, followed by the launch of the stablecoin-focused blockchain Tempo with Paradigm. Tempo went live on mainnet in March 2026.
Open USD, or OUSD, a global consortium stablecoin project with more than 140 participating companies, has adopted Bridge and Tempo, both controlled by Stripe, as its core infrastructure. In the report’s reading, competition around stablecoins has moved beyond company-level acquisitions and become a fight over who sets global market standards.
CEX investing is now mostly an M&A story
Centralized exchanges increased their share of total investment from 3.0% in 2024 to 18.2% in H1 2026. Tiger Research says this does not reflect a broad traditional VC expansion into new exchanges. From 2024 through H1 2026, M&A alone accounted for 75.5% of all CEX investment. In 2025, the share was 78.9%.
Investment volume was down from the prior year’s $19.4 billion peak, when large M&A transactions were concentrated, but it still stood at more than six times the 2024 figure of $340 million. Deal flow also stayed active, with an average of 3.8 transactions per month in H1 2026.
The report points to Naver’s stake purchase in Dunamu, still under review; Coinbase’s $2.9 billion acquisition of Deribit; Kraken’s $1.5 billion acquisition of NinjaTrader; and Abu Dhabi sovereign fund MGX’s $2 billion strategic investment in Binance.
At the same time, exchange venture units such as OKX Ventures and HashKey Capital are participating more aggressively in investments and acquisitions. CEX-linked players are increasingly operating on both sides of the table, as targets and as strategic investors.
Prediction markets emerged as a new capital destination
Prediction markets are described in the report as a new sector providing liquidity around real-world macro indicators such as economic data, elections, and policy decisions.
Tiger Research says the break came in May 2025, when formal approval from the U.S. Commodity Futures Trading Commission, or CFTC, opened the door for large-scale capital from hedge funds and asset managers to enter a regulated mainstream market.
@Kalshi crossed $100 billion in cumulative trading volume in June 2026. Before that, it had raised two separate $1 billion rounds, one led by Paradigm in December 2025 and another in a subsequent round led by Coatue. @Polymarket received a large investment from Intercontinental Exchange, or ICE, bringing its total fundraising to about $1.6 billion.
The report says prediction markets are not evolving into a crowded field of new projects. Instead, they already look structurally concentrated, with traditional financial institutions and top-tier capital repeatedly backing the two early leaders that secured regulatory approval first.
Custody remained quieter, but much larger
Funding into custody rose 15 times, from $20.4 million in 2024 to $317.1 million in H1 2026. Anchorage alone raised a $100 million strategic investment in H1 2026, accounting for roughly one-third of capital in the segment during the period.
For institutional asset managers that want to hold crypto directly, compliant custody infrastructure is essential, the report says. Growth in the segment tracks rising institutional demand for both asset management and custody services.
Tiger Research adds that all of these sectors share one feature: they maintained a stable capital base through large financings, and in each case that infrastructure demand was created by institutions entering the market.
From betting to control
In its conclusion, Tiger Research says the center of gravity in crypto investing has shifted away from sowing short-term bets and toward owning infrastructure and protocol exposure.
Before spot Bitcoin ETF approval and the regulatory improvement seen in 2024, the market was dominated by small, narrative-driven investments spread across many projects. The report says that model ended with collapses in gaming and NFTs and with the removal of VCs that stayed committed to it.
Now, the goal is no longer short-term speculation. The goal is long-term control over investment targets and on-chain infrastructure. Capital is being concentrated into assets with auditable revenue structures and regulatory licenses, or it is being used to directly acquire equity stakes that secure control of infrastructure itself.
The report also argues that in the past, early-stage venture backing served as a market signal. A VC investment could be read as smart money entering a project, helping lift token prices or attract early retail participation. Structural capital aimed at acquiring infrastructure and licenses does not send that same signal to retail traders.
That, Tiger Research says, is why retail investors no longer respond as strongly to VC funding headlines. The structure of money in the market has changed. In this environment, retail investors, like VCs, have to weigh opportunities far more carefully. The old betting model no longer fits either side.
About RootData and the report disclaimer
The report describes RootData as a Web3 asset data platform launched in early 2022, built to provide crypto investors and founders with a structured database of investments and fundraising activity. It says the platform now processes more than 3.4 million search queries per month and is used by more than 2 million crypto users. Its data and research have been cited by The Wall Street Journal, Cointelegraph, Binance Research, and The Block.
RootData says its purpose is to structure the information investors need, from discovering crypto projects to tracking capital and analyzing investor profiles.
The report also carries a disclaimer stating that it was prepared from materials believed to be reliable, but that no express or implied representation is made regarding accuracy, completeness, or fitness for use. Tiger Research says it accepts no liability for losses arising from use of the report or its contents. Conclusions, recommendations, estimates, forecasts, targets, opinions, and views may change without notice and may differ from or conflict with those of other people or organizations.
It adds that the document is for reference only and should not be treated as legal, business, investment, or tax advice. Any mention of securities or digital assets is illustrative only and does not constitute investment advice or an offer to provide advisory services. The material is not directed at investors or potential investors.
Terms of use
Tiger Research says reasonable use of its reports is permitted. It defines reasonable use as use for public-interest purposes that does not damage the commercial value of the material. If the use falls within that scope, prior permission is not required. But anyone citing a Tiger Research report must clearly identify the source as “Tiger Research” and include the Tiger Research logo.
If the material is to be reorganized and republished, separate consultation is required. Unauthorized use of the report may lead to legal action.