PitchBook: Coinbase Ventures, Kraken Ventures, and Binance Labs significantly cut dealmaking since Q1 2022; Coinbase did 11 deals in Q3, down from 65 in Q1 2022
Hannah Miller / Bloomberg :
Context & Ripple Effects
The pullback follows a broader contraction in crypto startup financing: PitchBook had already recorded a 31% quarter-over-quarter funding decline in Q2 2022, followed by a further year-over-year drop in Q3. That makes the reduced activity by exchange-affiliated investors part of a wider reset rather than an isolated portfolio decision.
The scale of Coinbase Ventures’ decline—from 65 investments in Q1 2022 to 11 in Q3—shows that a major source of strategic capital had become materially less active alongside the market-wide funding slowdown.
First-order effects
- Coinbase Ventures, Kraken Ventures, and Binance Labs are deploying into fewer startups; Coinbase Ventures’ Q3 deal pace is sharply lower than its Q1 2022 level.
- Crypto founders seeking investment from major exchange-linked backers face fewer immediate opportunities for capital, distribution partnerships, and strategic validation.
Second-order effects
- Startups that previously could run competitive processes among strategic crypto investors may need to rely more heavily on other VC sources or reduce financing ambitions.
- A thinner pipeline from exchange venture arms can narrow the pool of young companies positioned for commercial integrations with large trading platforms.
Third-order effects
- If the retrenchment persists, crypto venture funding may become more selective and concentrated around startups with clearer strategic fit or infrastructure relevance, rather than broad early-stage experimentation.
- The pattern reinforces that exchange-affiliated venture activity is cyclical and tied to the health of the wider crypto financing market, making founders more exposed when both strategic and financial investors pull back.
The trend: Crypto venture capital is shifting from the broad, high-volume deployment of the 2021–22 cycle toward a more selective market with fewer strategic investors writing checks.