Venture capital funding continues to support the cryptocurrency industry even as investment in decentralized finance (DeFi) keeps falling. New data shows that investors are still willing to put large amounts of money into promising crypto businesses. However, they are becoming more selective about where they invest, with DeFi projects receiving much less attention than before.
In July 2026, crypto startups raised about $1.2 billion through venture capital funding. Although this is a strong amount, the number of investment deals has dropped sharply. Only around 25 funding rounds had been completed by July 20, showing that fewer companies are receiving investments. This suggests that investors are focusing on a smaller number of startups they believe have the greatest potential.
Crypto funding has changed several times throughout 2026. Companies raised over $1.1 billion in January before funding dropped in February. Investment increased again in March, then fell sharply in April. May became the strongest month of the year, with nearly $3.9 billion raised.
Funding then slowed again in June, while July remained active despite the smaller number of deals. These changes show that large investment rounds can still keep overall funding levels high even when fewer companies receive support.
Some venture capital firms have remained very active throughout the year. Coinbase Ventures led the industry by participating in the highest number of investment deals over the past six months. Other major investors included Animoca Brands, a16z Crypto, Tether, and several other well-known firms.
At the same time, investment company Paradigm announced a new $1.2 billion fund that will support crypto alongside artificial intelligence, robotics, software, and hardware projects. Even with this broader investment strategy, the company said cryptocurrency will continue to be its main priority.
Not all areas of the crypto industry are attracting the same level of investment. Crypto exchanges received the largest share of funding during the past six months. Prediction markets, payment platforms, and artificial intelligence projects also attracted billions of dollars from investors. Blockchain companies, infrastructure projects, mining businesses, brokerages, and real-world asset projects also secured significant funding.
The United States remained the world’s leading crypto venture capital market, recording the highest number of funded projects. The United Kingdom, Singapore, China, and Japan also continued to attract investment, showing that crypto innovation remains active across several regions.
While many parts of the crypto industry continue to grow, DeFi is moving in the opposite direction. DeFi projects raised only about $654 million during the six-month period.
Venture capital investment in the sector has now declined for three consecutive quarters. The latest quarterly funding level is the lowest since late 2023, while the number of DeFi funding rounds has fallen to its lowest point since 2020.
It would be interesting to analyze how crypto trading activity has trended on major exchanges like Coinbase Global Inc. (NASDAQ: COIN) on a monthly basis since the year started. This would reveal any existing correlations between VC funding within the industry and trading activity.
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