In 2026, traditional finance and enterprises account for over 70% of new entrants in the crypto sector

Who is providing the funding determines where the money flows.

Written by: @JayLovesPotato

Compiled by: AididiaoJP, Foresight News

Crypto capital always follows the market

The growth of the crypto industry has never been driven by a single type of investor. Funds have flowed from retail investors, crypto-native VCs, diversified VCs, growth investors, private equity, traditional financial institutions, corporations, and corporate venture capital (CVC), to sovereign wealth funds, with the participants constantly switching according to market cycles. These funds then flow to project teams, infrastructure service providers, exchanges, market makers, and a broader range of ecosystem participants, forming the financing foundation of the entire market.

Therefore, who is providing funds to the crypto industry and how aggressively they are doing so can serve as a useful indicator of market interest and risk appetite.

Note: The above charts only account for rounds where both the amount and participating investors are disclosed in the DeFiLlama financing dataset, excluding retail public fundraising and other non-investment financing.

Relevant data shows that these capital flows are highly synchronized with market cycles. Attributable capital peaked at around $25 billion in 2021, significantly dropped in 2022 and 2023, and began to rebound in 2024. By 2025, with the rising popularity of RWA and stablecoins, the scale had rebounded to over $15 billion. However, as of 2026, this figure has dropped back to around $10 billion.

What is more noteworthy is not the total amount of funds deployed this year, but the significant change in the sources of new funds. The focus of new investors is increasingly shifting towards traditional financial institutions and corporations.

Traditional financial institutions and corporations are becoming new sources of funding

As of 2026, 17 institutional investors have entered the crypto sector for the first time, surpassing the 15 from the entire year of 2025. In stark contrast, the number of crypto-native investors has plummeted from 36 in 2025 to only 4 so far in 2026.

The composition of new investors has changed even more dramatically. In 2025, diversified VCs/growth/private equity investors accounted for 53.3% of new institutional investors, but this has dropped to 17.6% in 2026. In contrast, traditional finance/asset management/market infrastructure institutions now account for 47.1%, while corporations/corporate venture capital account for 29.4%. Together, they make up 76.5%, far exceeding the 40.0% in 2025.

This may not just be a change in the list of investors. Traditional financial institutions and corporations are more inclined to make strategic investments, as they may also become customers, business partners, or direct users of the infrastructure they invest in.

For example, the Korea Capital Market Institute (KCMI) believes that BlackRock's investment in Circle, as well as financial institutions' investments in Digital Asset, Fireblocks, and Securitize, are far more than mere financial bets. These investments also allow traditional institutions to access new technologies, integrate them into existing services, and position themselves more favorably in the next generation of financial infrastructure.

Specific transactions also confirm this point. Digital Asset explicitly positioned its $135 million financing in 2025 as a strategic round, attracting traditional financial institutions such as Tradeweb, BNP Paribas, DTCC, and Goldman Sachs, along with crypto-native investors like Polychain. Fnality similarly brought together shareholders such as Bank of America, Citigroup, Tradeweb, UBS, Goldman Sachs, and DTCC, working to build institutional-level settlement infrastructure that these institutions may directly use.

The overall investment trends of banks also point in the same direction. According to research from Ripple, CB Insights, and the UK Blockchain Technology Center, global banks participated in 345 blockchain investments from 2020 to 2024, with 33 of those exceeding $100 million each. Their focus is highly concentrated in areas related to their core business: institutional trading, tokenization infrastructure, payments, and digital asset custody.

In other words, the questions behind institutional capital are gradually shifting from "Which crypto company will appreciate?" to "What crypto infrastructure do we actually need for our business?"

Will this institutional capital flow into a broader crypto market?

The impact is likely to be more selective than in previous cycles.

In the past, a larger proportion of capital was betting on the growth of the entire market. Ample retail liquidity supported valuations and exit opportunities, benefiting not only project teams but also infrastructure service providers, market makers, media, marketing companies, and other ecosystem participants from the same wave of expansion.

Today, capital is being dispersed into competing fields such as AI and publicly traded stocks, and investments within crypto are becoming more cautious, focusing on infrastructure with clear demand or operational necessity. If institutional demand ultimately remains concentrated on payments, custody, settlement, and tokenization, then even if the institutional crypto market expands, it may not replicate the spillover effects of the early cycles across the entire ecosystem.

However, large financial institutions and payment companies will not start from scratch to build all capabilities. After acquiring the stablecoin infrastructure company Bridge in 2025, Stripe integrated it into its payment and stablecoin issuance system. In 2026, Mastercard acquired BVNK for up to $1.8 billion, directly connecting stablecoin payment infrastructure with existing payment tracks. BlackRock also took a similar approach with Securitize: first leading its $47 million strategic financing, then using Securitize as the issuer and tokenization infrastructure provider for BUIDL (its first tokenized fund), which later exceeded $1 billion in scale.

Therefore, as institutionalization progresses, not all functions will be absorbed internally by traditional financial institutions. Another parallel model is also forming: institutional investment, acquisition, or collaboration with mature crypto infrastructure providers, integrating these capabilities into existing financial products and distribution channels.

As regulatory frameworks become clearer, this demand may become even more defined. In the case of South Korea, as more companies participate in the crypto market, actual needs will arise in areas such as custody, internal control, and transaction management. This will naturally create a division of labor: which capabilities institutions build themselves and which they procure from specialized external service providers.

For existing crypto companies, the opportunity lies not in waiting for institutional capital to bring vague "trickle-down effects," but in transforming existing capabilities into things that institutions are willing to pay for today. Key management, validator and node operation, security, transaction monitoring, on-chain data, and reporting are all areas where crypto-native companies already have significant professional advantages.

In short, institutional capital is more likely to accelerate the formation of a new B2B market around "capabilities that institutions need but do not want to build themselves," rather than once again fully supporting the entire crypto market. For existing players, the key question is simple: which of the things we are already doing well are institutions truly willing to pay for?

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