Venture capital funding in the cryptocurrency sector reached approximately $1.4 billion in January 2026, marking a 14% increase year-over-year, according to DefiLlama data. Despite a decrease in the number of funding events from 85 to 60 compared to the same period last year, the average deal size has grown, indicating a shift towards fewer but larger projects. Institutional-grade infrastructure emerged as the most favored investment area, with significant capital directed towards stablecoins, payments, custody, and trading infrastructure. Traditional financial institutions such as BNY Mellon, Fidelity, Citadel Securities, and Bain Capital have notably increased their investments, alongside active participation from Frontier VC and crypto-native funds. The evolving regulatory clarity in the U.S. has also led to a noticeable focus on domestic projects.