AI Boom Doubles Revenue Bar for Crypto Startups
Three crypto startups closed deals this week as venture capitalists tighten their purse strings, with AI companies absorbing 80% of global VC funding in Q1 2026.
Key Takeaway
Crypto founders need double the revenue to compete as AI vacuums up VC cash.
Venture capitalists now expect crypto startups to hit ₱242.82 million ($4 million) in first-year revenue, double the ₱121.41 million ($2 million) benchmark that worked two years ago. Nightfall Networks CEO Paul Brody said crypto founders face a harsh new reality: what used to be strong early performance no longer cuts it.
The bar doubled because AI companies absorbed ₱14.69 trillion ($242 billion) in venture funding during Q1 2026 alone — roughly 80% of all global VC dollars deployed that quarter. That left crypto startups fighting over scraps in a market that raised just ₱2.25 billion ($37 million) this week across three deals, according to DefiLlama.
BetHog pulled in ₱607.05 million ($10 million) in a Series A round led by Will Ventures and RockawayX, bringing the Edinburgh-based crypto casino's total funding to $16 million. Co-founders Nigel Eccles and Rob Jones, who previously built FanDuel, launched a new business division called Sentient Studios alongside the raise. Malaysian exchange Hata secured $8 million from investors including Bybit and Tether, adding to its $4.2 million seed round and pushing its user count past 200,000. Abu Dhabi blockchain infrastructure firm KAIO raised $8 million from Laser Digital and others, lifting its total funding to $19 million.
Brody pointed to one silver lining: some VCs are sitting back and saying they've overcommitted to AI, and maybe need other things in their portfolios. That hedge mentality drove 40 cents of every venture capital dollar in 2025 toward crypto companies blending AI and blockchain — more than double the 18 cents from 2024.
Crypto investors told researchers they expect 2026 and 2027 to be strong investment years, with capital flowing toward stablecoins, payments, tokenization, and real-world assets. But the structural damage is done — allocators to crypto VC funds have declined since the AI boom began, and founders now need genuine passion projects to attract funding rather than riding hype cycles. Hata operates under licenses from Malaysia's Securities Commission and Labuan Financial Services Authority.
This article was written based on reporting from Dlnews.
