AI Investment Surge Diverts Funds from Crypto Startups

Several venture capitalists have warned that the growing interest in artificial intelligence is redirecting investments away from crypto startups. According to Odaily, Charles Chong, Vice President of Strategy at BlockSpaceForce, noted that investors now have "real alternatives with faster revenue visibility," prompting crypto teams to work harder and founders to be more precise in areas such as defensiveness and profit models. Data from DefiLlama indicates that crypto startups raised $128 million in the first week of March, with total funding reaching nearly $2.5 billion in 2026. This week's investors include Founders Fund, Ripple, Y Combinator, Wintermute, and Sequoia Capital, primarily focusing on payment, trading, and DeFi infrastructure sectors. The top three funding events this week are: Latin American fintech company ARQ completed a $70 million Series B round led by Sequoia Capital and Founders Fund, with an annual transaction volume exceeding $10 billion and approximately 2 million users; Crossover Markets secured $31 million in a Series B round led by Tradeweb Markets, with participation from Ripple and Wintermute, valuing the company at around $200 million, and operating the institutional digital asset trading network CROSSx; hybrid derivatives exchange QFEX raised $9.5 million in a seed round led by Yuri Sagalov of General Catalyst, with participation from Y Combinator and Paul Graham.