Crypto venture capital rebounded in the second quarter of 2026, with investors deploying $5.683 billion across 384 deals, according to Galaxy Research's quarterly report published on September 16. Capital deployment rose 31% from the first quarter, the deal count increased 10% quarter-over-quarter, and the figures point to renewed funding activity after a slower start to the year.

Late-Stage Rounds Capture the Bulk of Capital

Late-stage financing accounted for roughly 77% of all capital deployed during the quarter. Early-stage deals captured about 15 while seed and pre-seed rounds drew just 7% of the total.

One category dominated above all others. Trading, exchange, investing, and lending businesses collectively attracted approximately $3.523 billion — a figure notable for both its size and its concentration, given that it came from only 51 deals. That works out to an average deal size of more than $69 million in the category, which absorbed more than 60% of total quarterly funding. For scale, the quarter-wide average across all 384 deals was roughly $14.8 million, so the dominant vertical's checks ran several times larger than typical.

New Fund Formation Sinks to Multi-Year Low

Supply-side activity told a different story. Only five new crypto-focused venture funds raised money during Q2 2026, pulling in approximately $3.9 billion combined. Galaxy Research flagged this as the lowest volume of new fund formation since Q4 2019, a period when Bitcoin traded around $7,000 and most institutional investors still treated crypto as a novelty.

The supply-and-demand split is one of the report's more striking comparisons: the roughly $3.9 billion raised by new funds is smaller than the $5.683 billion deployed in a single quarter, meaning this quarter's deployment extended well beyond whatever the newest funds raised.

United States Remains the Center of Gravity

The United States continued to function as the center of gravity for crypto venture activity. US-based companies captured 73.5% of total capital deployed during the quarter and accounted for 39.1% of all deals. American companies thus represented fewer than four in ten deals while attracting nearly three-quarters of all dollars deployed.

Seed-Stage Squeeze and Sector Concentration

The distribution of capital underscores a challenging environment for seed-stage founders. Seven percent of $5.683 billion works out to roughly $398 million spread across what is likely a large number of small deals. Seed rounds are typically a company's first institutional capital, so the category's shrinking share of the mix serves as one gauge of how open the funding environment is to new teams.

The dominance of the trading and exchange category also highlights questions about sector diversity in the quarter's funding. With one vertical absorbing more than 60% of total capital, the health of the broader ecosystem depends heavily on that vertical's continued performance. Galaxy Research publishes this data quarterly, so the Q3 2026 update will show whether new fund formation recovers and whether capital spreads beyond the trading and exchange vertical.