GALAXY RESEARCH: CRYPTO STARTUP VALUATIONS HIT PEAK, BUT FUNDRAISING SIZE DROPS 40% On October 23, Galaxy Research released its VC Vital Signs report, updating the venture capital investment landscape for crypto companies in Q3 2026. - Data reveals a somewhat contradictory trend: company valuations continue to rise, while the median deal size has declined significantly. *Here are three key takeaways: 1. Capital continues to flow into early-stage projects - In Q3 2026, pre-seed deals accounted for approximately 25% of total transactions, while late-stage companies represented 24%. - This indicates that investment activity remains active in new startups, rather than being concentrated solely on firms with established products and revenue. => However, this reflects the volume of deals, not the total capital invested. Therefore, it cannot be concluded that pre-seed stages are attracting more capital than other stages. 2. Valuations rise, but deal sizes shrink - According to Galaxy Research, the average valuation for VC-backed crypto companies reached around $90 million—the highest level in the observed data series. - Meanwhile, the median deal size dropped from $5 million in Q2 to approximately $3 million in Q3—a 40% decline. - These two metrics reflect different aspects: valuation represents the price assigned to a company during funding rounds, while deal size reflects the actual capital raised. => Rising valuations alongside smaller fundraising amounts suggest that funds are still willing to accept high valuations but are becoming more cautious about the scale of their disbursements. *However, changes in the composition of surveyed companies may also influence these statistics. 3. How does VC capital impact the crypto market? - It’s important to distinguish between venture capital invested in crypto companies and actual capital flowing into secondary token markets. - Most VC deals involve equity stakes or private investment agreements with varying terms on valuation, allocation, and lock-up periods. - Therefore, rising startup valuations do not necessarily imply a corresponding increase in a token’s fully diluted valuation (FDV), nor do they conclusively signal the start of a new altcoin bull cycle. => If this trend continues, crypto projects may still access capital at relatively high valuations—but will need to accept smaller fundraising amounts and demonstrate more efficient capital utilization. Source: @glxyresearch Galaxy Research – VC Vital Signs, October 23, 2026