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Q1 2026 CRYPTO HIGHLIGHTS
The backdrop is now clear. Banking, payments, and financial market businesses have recognized and are now embracing the core innovations of crypto, renaming it Digital Assets. This embrace transforms crypto from a $3T cottage industry into a fundamental building block for industries multiple orders of magnitude larger. We have just begun this journey.
M&A activity remains roughly on par with record levels, albeit with total consideration paid down from record Q2 and Q3 2025 levels. This will likely prove an anomaly as transactions like Mastercard’s $1.8B acquisition of BVNK become more commonplace. The fundamental shift is that banking, payments, and financial services businesses are now viable and increasingly active acquirers. The other fundamental shift is the entry of Layer 1 | 2 protocols as motivated acquirers, driven by the desire to have offerings and apps higher in the stack. The acquirer universe is rapidly expanding, a very positive signal for both activity levels and valuation.
Private financings are off peak levels of activity and invested capital, but we are continuing to see improvement in the late-stage growth capital market. Series C or later rounds included familiar names like Polymarket, Rain, Keyrock, Alpaca, and Anchorage, all with valuations in excess of $1B. In spite of more challenging market conditions and lower trading volumes, markets and market infrastructure businesses captured the lion’s share of funding. Payments also continue to be a bright spot.
Q1 proved challenging for public markets, with stock market performance simply dismal. Overall, the average stock price decline across crypto brokers, exchanges, asset managers, and bitcoin network operators was 25%, with the single positive outlier being Circle, up 13%. With BTC, ETH, and the CoinDesk 20 Index down 24%, 33%, and 27%, respectively, and trading volume anemic at $15.1B, down 29.5% quarter over quarter according to The Block, it is not surprising.
Crypto has long been narrative-influenced. We are hopeful the narrative unfolding now proves more sustainable than previous ones. Payments, digital assets, and the embrace by traditional financial services certainly appear more substantive and consequential than what we have seen in the past.
Eric F Risley
Founder & Managing Partner
April 9, 2026