HedgeCo.Net — Venture investors deployed $4.519 billion into privately held crypto and blockchain companies across 296 deals in the third quarter, according to Galaxy Research. Capital invested fell 20% from the second quarter and deal count dropped 24%, with the decline driven mainly by a pullback in later-stage financing.
Fund formation was weaker still. Investors allocated about $1.3 billion to three new crypto-focused venture funds in the quarter, the fewest new funds in any quarter since the third quarter of 2019, Galaxy said. Year-to-date fundraising annualizes to roughly $8.2 billion, slightly below the $8.75 billion raised in 2025, with an average fund size of about $386 million and a median of $71 million.
Later-stage companies still captured about 76% of capital invested, while pre-seed and seed rounds made up 44.9% of deals. Trading, exchange, investing and lending businesses drew roughly $2.37 billion, about half of the quarter’s total, and have taken a majority of capital for four straight quarters. U.S.-headquartered companies received 74.9% of dollars invested.
Galaxy attributed the difficult fundraising environment to macro headwinds and competition for allocations from spot ETFs, digital asset treasury companies and artificial intelligence. It noted that the CLARITY Act has been pushed back, sovereign rates are rising and upcoming large IPOs from frontier AI labs are drawing investor attention. For the year to date, venture investors have put $14.537 billion into crypto across 1,040 deals.
For LPs, the data describe a market where capital is consolidating around crypto’s financial infrastructure while new managers struggle to raise. That dynamic tends to favor established crypto venture franchises and crossover investors writing larger later-stage checks.