VC Warns That AI Boom Is Diverting Funds from Crypto Startups

Odaily News Multiple venture capital professionals have warned that the AI boom is diverting funds away from crypto startups. Charles Chong, Vice President of Strategy at BlockSpaceForce, stated that investors now have "real alternatives with faster revenue visibility," and crypto teams need to work harder. Founders must be more precise in areas such as defensibility and profit models.

Data from DefiLlama shows that crypto startups raised $128 million in the first week of March, bringing the total funding for 2026 to nearly $2.5 billion. This week's investors included Peter Thiel's Founders Fund, Ripple, Y Combinator, Wintermute, and Sequoia Capital, with the primary focus on payments, trading, and DeFi infrastructure.

Top three funding events this week: Latin American fintech company ARQ completed a $70 million Series B round led by Sequoia Capital and Founders Fund. The company has an annualized transaction volume exceeding $10 billion and approximately 2 million users. Crossover Markets completed a $31 million Series B round led by Tradeweb Markets, with participation from Ripple and Wintermute, valuing the company at around $200 million. The company operates CROSSx, an institutional digital asset trading network. Hybrid derivatives exchange QFEX completed a $9.5 million seed round led by Yuri Sagalov of General Catalyst, with participation from Y Combinator and Paul Graham.