As capital flows sharply out of the crypto market in early 2026 and investor sentiment remains at extreme fear levels, venture capital allocation decisions have become a valuable signal. These moves help retail investors identify sectors that may still hold potential during a bear market.

Recent reports indicate that the crypto market environment has changed. The sectors attracting VC funding have shifted accordingly.

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VCs Invest Over $2 Billion in Crypto in Early 2026

Data from CryptoRank shows that venture capital firms have invested more than $2 billion into crypto projects since the beginning of the year. On average, weekly inflows have exceeded $400 million.

Several large deals stand out. Rain raised $250 million to build enterprise-grade stablecoin payment infrastructure. BitGo secured $212.8 million through its IPO, reinforcing its role as a digital asset custodian and security provider for institutional clients.

BlackOpal also raised $200 million for its GemStone product, an investment-grade vehicle backed by tokenized Brazilian credit card receivables.

Beyond these deals, Ripple invested $150 million in trading platform LMAX. The move supports the integration of RLUSD as a core collateral asset within institutional trading infrastructure. Tether also made a $150 million strategic investment in Gold.com, expanding global access to both tokenized and physical gold.

Analyst Milk Road notes that capital is no longer flowing into Layer 1 blockchains, meme coins, or AI integrations. Instead, stablecoin infrastructure, custody solutions, and real-world asset (RWA) tokenization have emerged as the dominant investment themes.

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Market data supports this shift. Since the start of the year, total crypto market capitalization has fallen by roughly $1 trillion. In contrast, stablecoin market capitalization has remained above $300 billion. The total value of tokenized RWAs has reached an all-time high of over $24 billion.

What Does the Shift in VC Appetite Signal?

Ryan Kim, founding partner at Hashed, argues that VC expectations have fundamentally changed. The shift reflects a new investment standard across the industry.

In 2021, investors focused on tokenomics, community growth, and narrative-driven projects. By 2026, VCs will prioritize real revenue, regulatory advantages, and institutional clients.

“Notice what’s absent? No L1s. No DEXs. No ‘community-driven’ anything. Every dollar went to infrastructure and compliance,” Ryan Kim stated.

The largest deals listed above involve infrastructure builders rather than token-driven projects designed to generate price speculation. As a result, the market lacks the elements that previously fueled hype cycles and FOMO.

“Not on speculation. Not on hype cycles. They’re looking at the pipes, rails, and compliance layers,” analyst Milk Road said.

However, analyst Lukas (Miya) presents a more pessimistic view. He argues that crypto venture capital is in a state of collapse, citing a sharp, sustained decline in limited partner commitments.

He points to several warning signs. High-profile firms such as Mechanism and Tangent have shifted away from crypto. Many firms are quietly unwinding their positions.

It may still be too early to declare the collapse of crypto VC, given that more than $2 billion has flowed into the sector since the start of the year. At a minimum, these changes suggest that crypto is integrating more deeply with the traditional financial system, a potential sign of long-term maturation.

Coinbase stock jumped by 5% on Friday, a day after the top crypto exchange reported weak financial results, including falling revenues and soaring losses.

Coinbase shares jumped to $147, well above the year-to-date low of $140. It remains well below the all-time high of $445.

Top analysts maintained a buy rating on COIN stock 

The rebound came after H.C. Wainwright maintained its buy rating on the company and set a $350 target. A move to that target would imply a 135% surge from the current level.

The company’s analysts noted that Coinbase had become a bargain after the recent crash, pushing it to its lowest level since 2024. 

Additionally, they noted that the company would benefit from the CLARITY Act, which has been stuck in the Senate Banking Committee. A meeting between banks and companies in the crypto industry at the White House failed to resolve the key issue of allowing stablecoin rewards.

Other Wall Street companies maintained their buy rating on Coinbase stock even as they lowered their target price. Chris Brender of Rosenblatt Securities lowered the target price from $325 to $240, while Needham’s John Todaro slashed it from $290 to $230. 

Benchmark’s Mark Palmer also slashed the target from $421 to $267. As a result, the average target among Wall Street analysts dropped to $303 from $400 three months ago.

Coinbase reported weak financial results on Thursday and blamed the ongoing crypto market crash. Its transaction revenue dropped to $982 million in the fourth quarter from $1.5 billion in Q4’24. This slowdown was offset by an increase in subscription and services revenue, which jumped to $727 million.

Coinbase reported significant quarterly losses after marking down its crypto assets like Bitcoin (BTC) and Ethereum (ETH). Its operating costs continued rising as it aims to become the “everything exchange”.

The company has invested in several key products, which it hopes will boost its revenue in the future. For example, it recently unveiled a prediction marketplace and aims to become a stockbroker by introducing tokenized stocks.

A major risk for Coinbase stock is that some analysts expect Bitcoin to remain under pressure in the near term. In a note on Thursday, analysts at Standard Chartered lowered their Bitcoin target to $100,000 and warned it could drop to $50,000.

Coinbase stock price technical analysis 

The weekly chart shows that the COIN stock price has crashed in the past few months as Bitcoin and most altcoins have plunged. It dropped to a key support level, marking the lowest swings since September 2024.

The coin remains below all moving averages, while the Relative Strength Index has moved to the oversold level of 30, its lowest swing since 2023.

Therefore, the most likely scenario is where it resumes the downtrend, potentially to the key support level at $100.

Truth Social Funds has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for two digital asset exchange-traded funds (ETFs) – the Truth Social Cronos Yield Maximizer ETF and the Truth Social Bitcoin and Ether ETF.

The Truth Social Cronos Yield Maximizer ETF will provide exposure to CRO, the native cryptocurrency of the Cronos ecosystem, while the Truth Social Bitcoin and Ether ETF will hold BTC and ETH. Both ETFs will also offer staking rewards.

The funds will be advised by Yorkville America Equities with a management fee of 0.95%.

“We are excited to launch our initial two Digital/Crypto offerings under Truth Social ETFs. In partnership with Crypto.com, we plan to provide an investment platform for investors covering multiple aspects of digital and crypto investing with both capital appreciation and income opportunities,” said Steve Neamtz, President of Yorkville America Equities.

According to the announcement, the introduction of these digital asset ETFs is expected to enhance market liquidity. It provides a more structured, regulated avenue for investing in cryptocurrencies, which is particularly appealing to those who have been hesitant due to volatility and regulatory uncertainty incrypto markets.

The move by Truth Social Funds is part of a broader trend in the financial industry, where traditional financial institutions are increasingly exploring the inclusion of digital assets.

This article was generated with the assistance of AI workflows.

Bitcoin (BTC) charged above $69,000 on Friday as US CPI data showed cooling inflation, leading traders to hope for a short-term BTC price recovery.

Key takeaways:

• Traders favor a short-term BTC price relief rally, but bulls must first take out the resistance at $68,000 to $70,000. 

• Bitcoin market analysis forecasts a short squeeze toward $80,000 if bulls succeed in confirming the $65,000 level as support.

Bitcoin price must take out resistance at $68,000

Bitcoin attempted a breakout on Thursday but “got slammed back down at the $68K level,” said analyst Daan Crypto Trades in a Friday post on X, adding:

“That’s the area to watch if BTC wants to see another leg up at some point.”

An accompanying chart showed the BTC/USD pair consolidating within a falling wedge in the one-hour time frame. 

Related: Bitcoin ETFs bleed $410M as Standard Chartered slashes BTC target

The pattern projected a short-term rally to $72,000 once the price breaks above the wedge’s upper trendline at $68,000.

Fellow Ted Pillows said that the “chances of a deeper correction would increase” if the $65,000-$66,000 support does not hold.

 “To the upside, if Bitcoin reclaims the $70,000 level, it could rally 8%-10% really quickly.”

From a technical perspective, BTC’s price action has been forming a V-shaped recovery chart pattern on the four-hour chart, as shown below.

The BTC/USD pair is retesting a key area of resistance defined by the 20-period EMA at $67,500 and the 200-week exponential moving average (EMA) at $68,000. 

Bulls need to push the price above this level to increase the chance of a rally to the pattern’s neckline at $72,000.

As Cointelegraph reported, if Bitcoin breaks $72,000, it will revive the hopes of a recovery toward the 20-day EMA at $76,000 and eventually, the 50-day simple moving average above $85,000, bringing the total gains to 26%.

Liquidation risk builds near $80,000

Exchange order-book liquidity data from CoinGlass showed Bitcoin’s price pinned below two walls of asks centered just below $75,000 and around $80,000.

“$BTC liquidations are stacking well above $72K, and around the area from $77K to $80K,” Bitcoin analyst ZordXBT said in his latest post on X.

Below the spot price, bid orders were lying down to $64,500, “where I have my limit orders placed,” the analyst said, adding:

“If the market holds itself here, it can very easily eat those liquidity bubbles.” 

The chart above suggests that if the $72,000-$75,000 level is broken, it could spark a liquidation squeeze, forcing short sellers to close positions and driving prices toward $80,000, which is the next major liquidity cluster.

Zooming in, Ted Pillows highlighted significant bid clusters at $65,000 and ask orders around $68,000, saying that the price is likely to revisit these areas to wipe out the liquidity.

“I think a revisit of $65,000 and a pump to $68,000 will both happen soon.”