VCs warn that the AI ​​boom is siphoning funds away from cryptocurrency startups.

Several venture capitalists have warned that the AI ​​craze is diverting funds away from crypto startups. Charles Chong, VP of Strategy at BlockSpaceForce, stated that investors now have "real alternatives with faster revenue visibility," and crypto teams need to work harder, with founders needing to be more precise in areas such as defensiveness and monetization models. DefiLlama data shows that crypto startups raised $128 million in the first week of March, bringing their total funding since 2026 to nearly $2.5 billion. Investors this week included Peter Thiel's Founders Fund, Ripple, Y Combinator, Wintertermute, and Sequoia Capital, primarily investing in payments, trading, and DeFi infrastructure. The top three funding events this week: 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 approximately 2 million users. Crossover Markets completed a $31 million Series B funding round led by Tradeweb Markets, with participation from Ripple and Wintermute. The company operates CROSSx, a digital asset trading network for institutions. The hybrid derivatives exchange QFEX completed a $9.5 million seed funding round led by Yuri Sagalov of General Catalyst, with participation from Y Combinator and Paul Graham.