Tiger Research said in its 2026 Q3 crypto investment report that the market rebound in the third quarter did not translate into a comparable recovery in funding for crypto companies. The report was written by Ryan Yoon and uses RootData as its main data source.
According to the report, Bitcoin rose 43% in Q3 after falling for two straight quarters in the first half of the year, marking its strongest third quarter since 2017. U.S. spot Bitcoin ETFs recorded $6.34 billion in net inflows. The crypto Fear and Greed Index, which had remained in extreme fear throughout the first half, entered greed on Aug. 20 and stayed there for most of September.
Tiger Research said disclosed deal value still shows that the rebound did not bring more investment into crypto businesses. Capital that returned with rising asset prices flowed directly into crypto assets, while company investments that lock up money for years did not move with short-term sentiment in the same way.
Five shifts that defined Q3
The report frames the quarter around five changes:
- M&A moved from expansion deals to capability acquisitions.
- The venture market saw weaker lead-investor influence and more strategic capital.
- Early-stage financing became more cautious, while investors favored proven businesses.
- Listings and debt financing gained importance relative to equity funding.
- Capital concentrated in infrastructure that connects crypto with traditional finance.
M&A: deal count was steady, but targets changed
M&A activity in Q3 was roughly in line with the first half by number of deals, but average deal size fell sharply. The report lists 39 M&A deals in Q1, 36 in Q2, and 37 in Q3. Data from Architect Partners, an advisory firm that tracks crypto M&A, showed Q3 crypto M&A deal count down 7% quarter over quarter and deal value down 83%.
Tiger Research attributes the decline in size to a shift in what buyers were purchasing. In the first half, the market was driven by acquisitions of entire companies to build out new business lines, such as Mastercard’s $1.8 billion acquisition of BVNK. In Q3, buyers focused more on filling gaps in existing operations.
The report cites several examples: Circle agreed to acquire Singapore-based cross-border payments company Tazapay, MoonPay agreed to acquire North Capital, which holds U.S. securities licenses, and BitGo acquired NYDIG’s institutional trading business.
It argues that building licensed capabilities internally takes time, while acquisitions can deliver both licenses and operational know-how immediately. At a stage when industry operating structures are still taking shape, that time advantage has become a competitive edge. The center of gravity in M&A is shifting away from entering new lines of business and toward obtaining specific capabilities.
VC market: traditional lead investors lost ground as strategic investors became more active
The report says the influence of the best-known lead investors dropped noticeably in Q3. The five most active lead investors since 2024 — Polychain, Pantera Capital, Hack VC, Paradigm, and a16z — led an average of 2.0 deals per month in the third quarter, down from 3.7 per month in the first half.
These firms had previously led 50% to 75% of the deals they joined directly and helped set valuation anchors for the market. Tiger Research says that control over round formation is weakening.
Strategic investors were more active. YZi Labs, formerly Binance Labs, participated in 14 deals in Q3, nearly three times its average monthly pace in the first half. Coinbase Ventures followed with 12 deals.
The report links that rise to a structural difference in incentives. Financial VCs are primarily looking for capital gains from higher equity or asset values. Exchange-linked venture firms can also benefit through higher trading volume and new users when portfolio companies are integrated with their own exchange or chain ecosystems, such as BNB Chain or Base.
That gives them a clearer reason to keep investing even when pricing and valuations remain uncertain. As a result, Q3 rounds reflected the influence of strategic investors trying to expand their own platforms more than the influence of financial investors setting prices.
Tiger Research describes the quarter as a shift from financial investing aimed at high return multiples to strategic investing built around business and ecosystem synergies.
Funding stages: seed rounds shrank while capital moved to Series A through C
Investors showed less willingness to take unproven risk. Seed rounds accounted for 15.0% of all deals in Q3, the lowest quarterly share since 2024. Average monthly seed deal count fell 28%, more than twice the 13% drop in overall deal count.
At the same time, disclosed investment value in Series A through C rounds rose 29% from the prior quarter. Series C funding in Q3 alone exceeded the total for the entire first half.
The report says early-stage investing spreads capital across a large number of smaller projects and relies on a small number of successes to generate outsized returns. For that model to work, later investors need to keep buying in at higher valuations, whether through equity or tokens.
With company financing more cautious in Q3, expectations for that follow-on support appear to have weakened. Investors instead concentrated capital in expansion rounds for companies that had already demonstrated their businesses through revenue and licenses.
Jeeves and EDX Markets both completed Series C rounds in the third quarter. They operate in payments and trading infrastructure, and the report treats them as examples of the same pattern. Investment criteria are moving away from token issuance timelines and toward evidence from operating businesses.
Financing structure: listings and debt took a larger share of large deals
Large capital raises in Q3 also came from outside traditional venture equity. Of the 13 transactions worth more than $100 million, four involved public listings or debt financing.
Securitize went public on the New York Stock Exchange through a SPAC merger, and Ripple Prime issued $275 million in unsecured senior notes. On a monthly basis, venture and strategic equity financing fell 24%, while debt financing increased from $70 million to $190 million and public-market fundraising rose from $80 million to $150 million.
Tiger Research notes that bonds and public listings require either repayment capacity or a market-based valuation from public investors. In the first half, debt financing was mainly associated with Bitcoin treasury companies such as Metaplanet, which borrowed to buy Bitcoin.
By the third quarter, companies with cash flow — including prime brokers, remittance businesses, and stablecoin lenders — were borrowing to expand operations. The base for repayment had shifted from Bitcoin prices to corporate cash flow.
The report says some companies can now raise capital more like conventional businesses and no longer need to rely on venture capital in the same way. That could narrow the role of VC to earlier stages.
Sector allocation: capital favored infrastructure tied to traditional finance
By sector, third-quarter capital went to businesses connecting traditional finance and crypto rather than to new layer 1 and layer 2 protocols.
Infrastructure accounted for 18.2% of disclosed investment in Q3, up from 8.1% in the first half. The increase came from AI-related transactions rather than new blockchain mainnets. The report highlights Ionic Digital, which shifted its business toward AI data centers, and AI training infrastructure company Prime Intellect.
About half of the capital grouped under “other” went to tokenized securities infrastructure, including Securitize and Alpaca. Payments and stablecoins were the only segment whose share remained unchanged.
By contrast, sectors with weaker ties to traditional finance drew much less capital. In prediction markets, a roughly $300 million Polymarket deal accounted for 91% of all investment in that segment during Q3. DeFi investment fell 71%, and deal count also declined, leaving the sector with just a 3.0% share. The largest DeFi transaction was Cari Network, a deposit token network backed by U.S. regional banks.
There were no new investments in custody. Activity there was limited to consolidation among mature firms, such as BitGo’s acquisition of NYDIG’s trading business.
Tiger Research says capital in Q3 flowed only to mature companies that already held licenses and regulatory approvals, or to projects with direct links to traditional financial institutions such as banks. The market’s focus shifted from building new crypto-native ecosystems to funding the distribution channels and infrastructure required for traditional financial capital to enter crypto.
Implications for crypto companies and founders
The report lays out several practical points for crypto companies and founders.
- Prepare for a longer early-stage fundraising cycle. Seed deal count fell faster than the broader market in Q3, so companies should recalculate runway conservatively and aim to reach concrete milestones before the next round, including revenue targets, licenses, or major partnerships.
- Review the terms attached to strategic capital. Funding from exchange-linked VCs is still available, but it may come with conditions such as commitments to use a specific exchange or blockchain. Companies should examine whether those terms could limit future financial investment or a future sale of the business.
- Build regulatory and licensing capabilities. Recent buyers have targeted immediately usable assets such as securities licenses, payment networks, and trading infrastructure, not simply full organizations. Companies considering partnerships or exits should identify their core capabilities and how they fit with potential counterparties.
- Use a broader financing mix. Businesses with stable cash flow can consider traditional funding tools such as bonds or credit lines to reduce equity dilution.
Implications for traditional financial institutions and corporations
For traditional financial institutions and corporates entering crypto, Tiger Research says acquisitions may be a more efficient route than internal buildouts. For a new crypto business line, buying a specialist firm with licenses and operating experience may save time compared with building infrastructure from scratch.
The report also says disclosed transaction value alone does not show how the market is valuing these businesses. Buyers should focus first on strategic fit with their own operations and work with professional advisers to test whether a deal can create value beyond headline price.
Implications for investors and retail participants
For investors and retail market participants, the report says venture financing announcements should not be treated automatically as buy signals. It argues that the old pattern of large token sales and outsized trading gains is harder to expect in the current market, and that upside from early positions is more limited.
It recommends evaluating projects through revenue structure, regulatory compliance, and links to traditional finance, rather than focusing on token issuance schedules or short-term headlines.
Tiger Research writes that the crypto market is moving beyond short-term expectations and toward demonstrating real value and practical use. Some investors may dislike that shift, but the report views the market’s transition toward an industry structure as a healthier development. Participants who recognize the structural change and strengthen their core capabilities and risk management will be better prepared for the next phase.
Data and methodology
The report uses data from January 2024 through September 2026 based on the RootData API, covering 3,515 funding rounds and tagged by RootData registration date. Ionic Digital and Gauntlet, which closed in June but were announced in July, were counted in the third quarter.
RootData recorded 195 third-quarter entries. Two were not investments and were excluded: the DEX launch partnership between Robinhood and dYdX Labs, and membership in the Ethereum institutional alliance. That left 193 transactions for analysis.
For transaction value, the report counts only the sum of disclosed amounts. Of the 193 Q3 transactions, 112 disclosed a value. In the first half, 286 of 441 transactions disclosed a value. Undisclosed transactions were excluded, meaning actual activity was larger than the reported totals. One Raven round listed at $90 million in RootData was excluded because the original source showed that figure as a valuation rather than investment amount.
M&A value and the reported 83% decline in M&A were calculated only from transactions with recorded amounts in RootData. Deals with disclosed value but no recorded RootData amount were noted separately in the text, including Circle and Tazapay at $400 million based on SEC filings, and Future Asset and Korbit at about KRW 141.4 billion, or about $100 million. Quarter-over-quarter M&A comparisons for Q3 reference Architect Partners data.
For financing type, the report follows RootData’s round classifications for M&A. Public fundraising includes IPOs, post-listing financings, and Securitize’s listing. Debt includes debt financings, the Ripple Prime notes, and the debt portion of Félix Pago’s round. Token sales include OTC and public-sale rounds. All remaining transactions are classified as venture and strategic equity, including purchases of shares from existing shareholders, such as Hana Financial Group and Samsung Securities buying Dunamu shares in the first half.
Because the first half and the third quarter cover different lengths of time, the report converts deal count and funding amount into monthly averages for comparison. First-half figures were recalculated after later RootData revisions, to 441 transactions from the previously stated 435.
Stage-level statistics such as seed and Series A through C include only deals for which RootData recorded a stage, which covers 143 of the 193 Q3 transactions. The report notes that Fasset’s Series C and Augustus’s Series B were excluded from the stage analysis because RootData did not record their stages.
Each transaction was assigned to a single sector based on RootData project tags, using a priority order that favored more specific business models: prediction markets, CEX, custody, payments and stablecoins, DeFi, gaming, NFT, social and entertainment, and infrastructure. Large deals without tags were manually classified after business review, and unmatched transactions were placed in “other.”
Institution-involved deals were defined as transactions with at least one investor categorized by RootData as a company or institutional entity. The report says this is the same standard used in its previous report for “deals involving traditional financial institutions.”
Deals with direct traditional finance participation were defined more narrowly as those involving at least one bank, securities firm, asset manager, exchange operator, payment network, credit-rating or data company, traditional market maker, or the investment arm of one of those institutions. Transactions without investor data in RootData were excluded, which means the reported share is conservative. Examples not counted for that reason include Hana Financial Group and Samsung Securities’ first-half acquisition of Dunamu shares, and a U.S. regional bank investment in Cari Network during Q3. Investor identities identified through keyword screening were checked one by one. Fintech firms such as PayPal, Stripe, Robinhood, and Nium were not counted as traditional financial institutions.
The report says all key Q3 transactions mentioned in the text were cross-checked against company press releases, regulatory filings, and mainstream media reports. Deals still at the agreement stage — including S&P Global and OpenZeppelin, Nasdaq and LeveL Markets, and Circle and Tazapay — had not yet closed.
For market indicators, Bitcoin price and quarterly return data were based on Binance BTC/USDT daily close prices in UTC. The crypto Fear and Greed Index came from Alternative.me. U.S. spot Bitcoin ETF net flow data came from SoSoValue figures cited by Investing.com. The CLARITY Act vote and SEC exemptions were based on U.S. Senate voting records and reporting tied to SEC announcements.