- Coinbase’s venture arm says Q2 is a ‘builders market’ despite quieter trading.
- Tokenisation, exchanges, next-gen DeFi and AI agents top the agenda.
At a glance, things look grim for crypto startups.
Investors poured just under $5 billion into innovating industry players in the first three months of 2026, a 15% drop from the capital injected in the first quarter of 2025, according to data from DefiLlama.
Add to that that the overall crypto market is still down some 40% from its October all-time high value, the industry is sacking hundreds of employees and blaming it on artificial intelligence, and decentralised finance projects are shutting down, and it’s clear things look gloomy for entrepreneurs.
However, the industry will come out stronger for it, Jonathan King, principal investor at Coinbase Ventures, told DL News.
“When things look quiet or the market is more tough, that’s when the best companies often get started,” King said. “And the investors who show up then win big later. That’s what we’re seeing right now, and why we were a top crypto investor in Q1.”
He’s not alone. It’s a sentiment shared by investors like Andreessen Horowitz, Sequoia Capital, Founders Fund, Bain, and Alibaba Group.
“Conviction shows up when it’s not obvious,” King told DL News. “Anyone can invest in a hot market, but the real signal is who leans in before it’s consensus.”
He said investors will focus on “four buckets:” Tokenisation, specialised exchanges, next-generation DeFi, and AI.
‘Perpification of everything’
Tokenisation, or the “perpification of everything,” as King calls it, is a massive opportunity.
“Markets are expanding beyond crypto into real-world assets — stocks, commodities, macro exposure — that are all moving onchain,” King said.
Indeed, financial markets are rapidly expanding beyond native crypto assets into equities, commodities and macro exposure that can trade continuously onchain, with volume on perpetual exchanges like Hyperliquid exploding into the billions.
Firms like BlackRock, RobinHood, Greyscale have all waxed lyrical about assets going online and for good reason.
The tokenisation market is expected to jump by 754 times to become a $20 trillion market by 2030, according to BlackRock.
Specialised exchanges
Institutional market infrastructure — things like specialised exchanges and other trading technologies — are thriving, King said.
“We’re seeing a shift toward more purpose-built, pro-grade market structures, prop [automated market makers], verticalised trading apps, prediction markets,” he said.
Bernstein forecasted that the institutional crypto trading market’s value will more than triple, from $5 billion in 2024 to $18 billion by 2030, with the US market share surging from 7% to 20%.
Next generation DeFi
Advanced DeFi protocols that are “more composable, more capital efficient, more private” are next on King’s list.
“The next wave is improved protocols built to integrate and scale,” he said.
The sentiment is shared by banks like the Japanese financial giant Nomura. The bank’s 2026 Digital Asset Institutional Investor Survey shared with DL News on Thursday found that institutional investors are pursuing cryptocurrency yield strategies rather than just token price appreciation.
Its research found that over two-thirds of respondents want exposure to DeFi mechanics like staking, while 65% are targeting lending and tokenised assets, and 63% are exploring derivatives and stablecoins.
“This reflects growing demand for income-generating and asset-utilisation strategies,” Nomura said.
King also stressed that “privacy is a big unlock here.”
The Ethereum Foundation shares the same view. In October, it rolled out a new expanded effort to embed privacy into the blockchain, led by a new “Privacy Cluster” team of 47 engineers, researchers, and cryptographers.
Ethereum co-founder Vitalik Buterin has publicly endorsed privacy tech like Railgun and other similar efforts, arguing that privacy should be a default option for blockchain users.
“Privacy is in every financial system except for DeFi,” Railgun contributor Bill Liang told DL News in October.
Crypto and AI
AI agents are “one of the most underappreciated areas” in crypto, according to King.
“AI agents are becoming economic actors,” he said. “Every agent is effectively a new “user” of the blockchain.”
The view is shared by Coinbase CEO Brain Armstrong, former Binance CEO Changpeng Zhao and Circle CEO Jeremy Allaire.
Coinbase has teamed up with tech titans like Amazon, Google, and Stripe for its x402 protocol.
x402 is designed as a universal standard for embedding payments directly into web interactions. It allows AI agents, APIs and applications to transfer monetary value as seamlessly as they exchange data over the internet.
By 2030, the market will reach as high as $5 trillion, according to McKinsey.
Some of the themes laid out by King echo along the top three capital raises this week, according to DefiLlama data.
Payward, $200 million
Payward, the parent company behind the cryptocurrency exchange Kraken, raised $200 million through secondary shares sales to Germany banking giant Deutsche Börse Group.
The move values Kraken at about $13.3 billion, down from $20 billion in late 2025.
The company made five acquisitions in 2025. Kraken co-CEO Arjun Sethi told DL News in September that the crypto exchange had more deals lined up.
Spektr, $20 million
Copenhagen-based Spektr has raised $20 million in a Series A round. NEA led the raise with backing from Northzone, Seedcamp, and PSV Tech.
Spektr uses AI agents to handle compliance tasks like know-your-customer and company risk checks, replacing manual processes that still dominate the financial industry.
Paxos Labs, $12 million
Blockchain infrastructure firm Paxos Labs has raised $12 million in a strategic funding round at an undisclosed valuation, Fortune reported.
Blockchain Capital led the round. Robot Ventures, Arthur Hayes’ family office Maelstrom, and Uniswap Labs Ventures also supported the raise.
The funding will be used to expand Amplify, Paxos’s software toolkit that allows businesses to add crypto services such as lending, yield products, and stablecoin issuance.
You’re reading the latest instalment of The Weekly Raise, our column covering fundraising deals across the crypto and DeFi spaces, powered by DefiLlama.
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com. Eric Johansson is DL News’ managing editor. Got a tip? Email him at eric@dlnews.com.
