Multiple VCs warn that the AI boom is diverting funds from crypto; crypto financing still reached $128 million in the first week of March.

Gate News reports that on March 7th, several venture capitalists warned that the AI boom is diverting funds away from crypto startups. BlockSpaceForce Vice President of Strategy Charles Chong stated that investors now have “more immediate and visible alternatives,” and crypto teams need to work harder, with founders needing to be more precise in areas like defensibility and revenue models.

According to DefiLlama, crypto startups raised $128 million in the first week of March, bringing the total funding since 2026 to nearly $2.5 billion. This week’s investors include Founders Fund (Peter Thiel), Ripple, Y Combinator, Wintermute, and Sequoia Capital, mainly investing in payments, trading, and DeFi infrastructure.

The top three funding events this week are: Latin American fintech company ARQ completed a $70 million Series B funding round led by Sequoia Capital and Founders Fund. The company has an annualized trading volume of over $10 billion and about 2 million users; Crossover Markets raised $31 million in a Series B led by Tradeweb Markets, with Ripple and Wintermute participating, valuing the company at approximately $200 million. It operates the institutional digital asset trading network CROSSx; hybrid derivatives exchange QFEX completed a $9.5 million seed round led by Yuri Sagalov of General Catalyst, with Y Combinator and Paul Graham participating.