Venture capital investment in the cryptocurrency sector surged to $4.65 billion in the third quarter of 2025, marking a 290% increase from the previous quarter, according to a Galaxy Digital report. This figure represents the second-highest level of investment since the FTX collapse in 2022, with the highest being $4.8 billion in Q1 2025. The quarter saw 414 deals, with major funding rounds such as Revolut's $1 billion and Kraken's $500 million accounting for half of the total investment. US companies attracted 47% of the venture capital, while firms in Singapore and the UK received 7.3% and 6.8%, respectively. Despite the increase, venture capital activity remains below the peak levels of the 2021-2022 bull market. Factors such as reduced interest in gaming and NFTs, a shift of funds to AI, and the current interest rate environment are contributing to this trend. Additionally, compliant investment vehicles like spot ETFs are increasingly competing with traditional venture capital for institutional funds.