VC warns that the AI boom is draining funds from cryptocurrency startups

SmartContractAuditor · 2026-03-07T08:32:38+00:00

Multiple venture capitalists warn that the AI boom is affecting funding for crypto startups. Although crypto projects raised $128 million in March, bringing the total close to $2.5 billion, investors are more inclined toward investment options with quicker visibility. Major funding events include ARQ's $70 million raise and Crossover Markets' $31 million raise.

SmartContractAuditor

2026-03-07 08:32:38

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Odaily Planet Daily reports that several venture capitalists warn that the AI boom is diverting funds away from crypto startups. BlockSpaceForce Vice President of Strategy Charles Chong states that investors now have “more immediate and tangible alternatives” for income, and crypto teams need to work harder. Founders must be more precise in defensive strategies and revenue models.

Data from DefiLlama shows that crypto startups raised $128 million in the first week of March, with total funding approaching $2.5 billion since 2026. This week’s investors include Peter Thiel’s Founders Fund, Ripple, Y Combinator, Wintermute, and Sequoia Capital, mainly investing in payments, trading, and DeFi infrastructure.

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

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