Tiger Research said the crypto funding market in the third quarter of 2026 looked very different from the price action. Sentiment turned from fear to greed, but company financing did not rebound in step. Capital returned to crypto assets first, while long-duration bets on startups stayed under pressure.
The report, published by Tiger Research Reports and translated by TechFlow, lays out five changes for Q3: M&A shifted from expansion deals to capability acquisitions, legacy lead VCs lost influence, early-stage rounds contracted, debt and public listings gained ground against equity financing, and capital clustered around infrastructure linked to traditional finance.
Market sentiment improved, but funding for companies stayed tight
According to the report, Bitcoin rose 43% in Q3 after posting declines in each of the first two quarters of the year, marking its strongest third quarter since 2017. US spot Bitcoin ETFs recorded $6.34 billion in net inflows. The crypto Fear and Greed Index, which had remained in extreme fear through the first half, entered greed on Aug. 20 and stayed there for most of September.
That rebound did not carry over into disclosed investment totals for crypto companies. Tiger Research said money coming back with the price recovery flowed directly into crypto assets, while enterprise investment, where capital may be locked up for years, did not respond to the short-term change in market mood.
Five changes defined Q3
- M&A moved from expansion-driven deals to capability-driven acquisitions.
- The VC market saw weaker influence from lead investors and stronger activity from strategic capital.
- Investors became more cautious on seed and other early rounds, with money concentrating in businesses that had already proved themselves.
- Public listings and debt financing gained share relative to venture equity.
- Capital focused on infrastructure tied to traditional finance rather than isolated blockchain ecosystems.
M&A: buying capabilities instead of buying new business lines
M&A volume in Q3 was broadly steady against the first half, but deal size dropped sharply. The report lists 39 M&A deals in Q1, 36 in Q2, and 37 in Q3. Data from crypto deal advisory firm Architect Partners showed Q3 deal count down 7% quarter over quarter and deal value down 83%.
Tiger Research ties the decline in deal size to a change in acquisition targets. In the first half, the market was driven by deals aimed at building new business lines through full-company acquisitions, including Mastercard’s $1.8 billion acquisition of BVNK. In Q3, buyers were more often filling operational gaps in businesses they already had.
The report cites several examples: Circle agreed to acquire Singapore-based cross-border payments company Tazapay, MoonPay agreed to acquire North Capital, which holds US securities licenses, and BitGo acquired NYDIG’s institutional trading business.
Building a license and proving a capability internally takes time. An acquisition can deliver both at once. Tiger Research said that in an industry where operating structures are still taking shape, that time savings has become a competitive edge, and the focus of M&A is moving quickly away from expansion into new lines and toward acquiring specific capabilities.
VC market: legacy lead firms lost clout as strategic investors became more active
The report says the influence of major lead investors fell noticeably in the third quarter. The five most active lead firms since 2024 — Polychain, Pantera Capital, Hack VC, Paradigm, and a16z — led an average of 2.0 deals per month in Q3, down from 3.7 in the first half.
Those firms had previously directly led 50% to 75% of the rounds they joined and served as valuation anchors for the market. Tiger Research said their grip on round formation is weakening.
Strategic investors moved in the other direction. YZi Labs, formerly Binance Labs, participated in 14 deals in Q3, nearly three times its monthly average in the first half. Coinbase Ventures followed with 12 deals.
Tiger Research attributes that rise partly to the structure of CEX-linked investing. Financial VCs pursue capital gains through higher equity or asset values. CEX-linked VCs can also benefit when portfolio companies launch on their affiliated exchanges or public chains such as BNB Chain or Base, generating added trading volume and new users.
That gives those firms a reason to keep investing even when pricing and valuations remain uncertain. As a result, Q3 rounds reflected the influence of strategic backers trying to expand their own platforms and ecosystems more than the influence of financial investors setting price.
The report describes the quarter as a shift away from financial VC chasing outsized returns and toward strategic investment aimed at operating and ecosystem synergies.
Stage mix: early rounds contracted while proven businesses attracted more money
Investors were less willing to underwrite unproven risk in Q3. Seed deals accounted for 15.0% of all transactions, the lowest quarterly share since 2024. Monthly seed deal count fell 28%, more than double the 13% decline in overall transaction count on a monthly basis.
At the same time, disclosed investment value in Series A through Series C rose 29% quarter over quarter, and Series C financing in Q3 alone exceeded the total for the entire first half.
Tiger Research said the classic early-stage model depends on later investors continuing to buy equity or tokens at higher valuations. With company financing turning 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 proved their businesses through revenue and licensing.
The report points to Jeeves and EDX Markets, both of which completed Series C rounds in Q3. Both are tied to payment and trading infrastructure. In Tiger Research’s view, that pattern shows the market is shifting its standard of proof away from token issuance timetables and toward operational evidence.
Funding structure: listings and debt took a larger role than VC equity
Large capital raises in Q3 did not come only from venture equity. Of 13 transactions worth more than $100 million, four involved public listings or debt financing, the report said.
Securitize went public on the New York Stock Exchange through a SPAC merger. Ripple Prime issued $275 million in unsecured senior notes. On a monthly basis, venture and strategic equity financing fell 24%, while debt financing rose from $70 million to $190 million and listing-related fundraising increased from $80 million to $150 million.
Debt and public listings require either repayment capacity or a valuation set by public markets. In the first half, debt financing had been concentrated among Bitcoin treasury companies such as Metaplanet, which borrowed to buy Bitcoin. In the third quarter, companies with cash flow — including prime brokers, remittance firms, and stablecoin lenders — borrowed to expand their businesses.
That marks a change in repayment footing, from Bitcoin price exposure to corporate cash flow. Tiger Research said some companies can now fund themselves more like conventional businesses, without relying on venture capital in the same way, which could narrow the role of VC to earlier stages.
Sector allocation: capital gathered around infrastructure linked to traditional finance
By sector, Q3 capital flowed toward areas connecting traditional finance with crypto rather than toward new layer 1 and layer 2 protocols.
Infrastructure’s share of disclosed investment more than doubled from 8.1% in the first half to 18.2% in Q3. The increase came from AI-related deals rather than new blockchain mainnets. The report names Ionic Digital, which shifted its business toward AI data centers, and AI training infrastructure company Prime Intellect as leading examples.
Within the capital bucket classified as “other,” about half went to tokenized securities infrastructure, including Securitize and Alpaca. Payments and stablecoins were the only segment whose share remained unchanged.
Areas with weaker links to traditional finance pulled in much less capital. In prediction markets, one roughly $300 million Polymarket transaction accounted for 91% of investment in that category during Q3. DeFi investment fell 71%, deal count also declined, and the category’s share dropped to 3.0%. The largest DeFi deal was Cari Network, a deposit token network backed by US regional banks. In custody, there were no new investments, with activity limited to consolidation among mature companies such as BitGo’s acquisition of NYDIG’s trading business.
Tiger Research said Q3 capital largely went to mature companies that already held licenses and regulatory approvals, or to projects with links to traditional financial institutions such as banks. The center of gravity is shifting away from building new crypto ecosystems and toward the distribution channels and infrastructure that traditional finance needs to enter crypto markets.
What the report says this means for market participants
Crypto companies and founders
The report advises teams to prepare for longer early-stage fundraising cycles. Because seed activity fell faster than the market average in Q3, companies should recalculate runway conservatively and aim to reach concrete milestones before the next round, including revenue, licenses, or major partnerships.
It also urges founders to review the terms attached to strategic investment. Capital from CEX-affiliated VCs is still available, but it may come with commitments to use a specific exchange or blockchain. Teams should check early whether those conditions could constrain later financial investors or a company sale.
Tiger Research also highlights the value of building regulatory and licensing capabilities. Recent acquirers have focused on immediately usable assets such as securities licenses, payment networks, and trading infrastructure rather than whole companies. Businesses with stable cash flow, it adds, may want to consider more conventional funding tools such as debt issuance or credit lines to reduce equity dilution.
Traditional financial institutions and corporates
For firms entering crypto, the report says acquiring a specialist company with licenses and operating experience may be more efficient than building infrastructure internally from scratch. M&A around infrastructure, licenses, and trading capabilities continues to rise.
It also warns that disclosed deal value alone is not enough to judge how the market prices these businesses. Buyers should focus first on fit with their existing operations and work with specialist advisers to test whether a deal can create value beyond headline price.
Investors and retail market participants
Tiger Research says VC funding announcements should not be treated automatically as buy signals. The market environment that once supported large token sales and outsized trading returns is harder to find now, and retail participants should recognize that the upside in early positions is more limited.
Projects, the report says, should be judged by revenue structure, regulatory compliance, and links to traditional finance rather than by token launch schedules or short-term headlines. In its view, the crypto market is moving past short-term expectations and toward demonstrated value and practical use cases.
The report adds that while some investors may regret that change, the market’s evolution toward an industry can be seen as healthy. Participants that recognize the structural shift and strengthen their core competencies and risk management will be better prepared for the next stage.
Data and methodology
The dataset covers January 2024 through September 2026 and is based on the RootData API. It includes 3,515 funding rounds, tagged by RootData registration date. Ionic Digital and Gauntlet, both completed in June but announced in July, were counted in Q3. Of 195 Q3 records in RootData, two were excluded because they were not investments: a DEX launch partnership between Robinhood and dYdX Labs, and membership in the Ethereum institutional alliance. That left 193 transactions for analysis.
Amounts in the report are the sum of disclosed deal values only. Of the 193 Q3 transactions, 112 disclosed amounts. In the first half, 286 of 441 transactions disclosed amounts. Undisclosed deals are not included, so actual volume was higher than the reported totals. A $90 million Raven round listed in RootData was excluded because the original source showed the number was a valuation rather than an investment amount.
M&A value, including the reported 83% drop in deal value, is based only on transactions with amounts recorded in RootData. Deals with disclosed values but no RootData amount entry were noted separately in the text, including Circle and Tazapay, which the report says was $400 million based on SEC filings, and Mirae Asset and Korbit, at roughly KRW 141.4 billion, or about $100 million. Q3 M&A comparisons were benchmarked against Architect Partners quarterly data.
For financing type, M&A follows RootData round-type classification. Listing-related fundraising includes IPOs, follow-on public raises, and Securitize’s listing. Debt includes debt rounds, 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 grouped as venture and strategic equity financing, including secondary share purchases such as Hana Financial Group and Samsung Securities buying Dunamu shares in the first half.
Because the first half and Q3 cover different lengths of time, deal count and amount were converted to monthly averages for comparison. First-half data was recalculated after later RootData revisions and totaled 441 deals, up from a previous figure of 435.
Stage analysis, including seed and Series A to C, includes only deals with an explicit stage recorded in RootData, 143 out of 193 Q3 transactions. Examples such as Fasset’s Series C and Augustus’ Series B were excluded from stage analysis because RootData did not record a stage for them.
Sector classification assigns each deal to a single category based on RootData project tags, with priority given in this order to 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. Transactions that could not be matched to any category were placed in “other.”
Deals with institutional participation are defined as those involving at least one investor that RootData classifies as a company or institutional entity. That is the same approach used in the previous report for “deals with traditional financial institution participation.” Direct participation by traditional financial institutions requires at least one bank, securities firm, asset manager, exchange operator, payment network, credit rating or data company, traditional market maker, or an investment arm of those institutions. Deals without investor information in RootData were excluded, making the figure conservative. That means transactions such as Hana Financial Group and Samsung Securities buying Dunamu shares in the first half, and US regional banks investing in Cari Network in Q3, were not counted because investor data could not be obtained. Investors identified through keyword screening were reviewed one by one, and fintech firms such as PayPal, Stripe, Robinhood, and Nium were not counted as traditional financial institutions.
The report says all key Q3 transactions cited in the text were cross-checked against company press releases, regulatory filings, and mainstream media coverage. Deals still at agreement stage and not yet closed include S&P Global and OpenZeppelin, Nasdaq and LeveL Markets, and Circle and Tazapay.
For market indicators, Bitcoin price and quarterly returns are based on Binance BTC/USDT daily closing prices in UTC. The crypto Fear and Greed Index comes from Alternative.me. US spot Bitcoin ETF net flow data comes from SoSoValue as cited by Investing.com. The CLARITY Act vote and SEC exemptions are based on US Senate voting records and related coverage of SEC notices.
Usage terms
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