Crypto startups secured nearly $5 billion in funding during the first quarter of 2026, marking a 16% decline from the previous year, according to ChainCatcher's report citing DefiLlama data. Despite the drop, the investment landscape is shifting towards practical sectors, with prediction markets leading the way, attracting over $1.7 billion. Payments infrastructure followed with $735 million, and transaction infrastructure garnered $423 million. Major non-crypto institutions like Sequoia Capital, Founders Fund, Bain Capital, and Alibaba have increased their involvement in the crypto space. Notable funding deals include Kalshi's $1 billion round led by Coatue Management, Polymarket's $600 million backed by Intercontinental Exchange, and Rain's $250 million Series C led by Iconiq Capital. Other significant deals involved BitGo, Flying Tulip, and Whop, highlighting the diverse interest in crypto infrastructure and services.