2026 Crypto Financing Reshuffle: Gaming and DePIN Are Dead, Two Prediction Market Deals Gobble Up 18% of Yearly Funding

marsbitPublished on 2026-05-09Last updated on 2026-05-09

Abstract

Crypto Funding Shakeup in 2026: Gaming & DePIN Fade, Prediction Markets Dominate Analysis of crypto funding from January 1 to May 6, 2026, reveals a major sectoral shift. The industry raised $8.65 billion across 305 deals. However, a March surge to $4.57 billion was largely due to two mega-deals: BVNK's $1.8 billion acquisition and a $1 billion raise by Kalshi. Excluding these, monthly funding is a sluggish ~$1 billion. Capital concentration is extreme. The Payments ($3.74B) and Consumer ($2.48B) sectors absorbed 72% of all funds. Within Consumer, prediction markets were dominant: Kalshi's $1B and Polymarket's $600M raises together accounted for 18% of the year's total, surpassing all 47 DeFi deals combined ($1.06B). In contrast, Gaming and DePIN sectors saw funding nearly vanish. A strategic pivot is underway. Merger & Acquisition (M&A) activity reached 48 deals, nearly matching the 57 seed-stage rounds. This indicates capital is increasingly flowing toward acquiring established leaders rather than betting on new ideas. The most active investors so far in 2026 are Coinbase Ventures (18 deals), Tether (13 deals), Animoca Brands (11 deals), and GSR (11 deals). Notably, a16z's pace has slowed significantly compared to its 2021-2026 average.

Author: Memento Research

Compilation: TechFlow Deep Tides

Deep Tides Intro: Crypto financing data from the first four months of 2026 reveals a brutal reality: funding for the gaming and DePIN sectors has nearly dried up, while Kalshi and Polymarket, two prediction market companies, have taken more money than all DeFi projects combined for the entire year. More alarmingly, the number of M&A deals has caught up with seed rounds, indicating that capital is shifting from betting on new ideas to acquiring existing industry leaders.

Financing Overview: The March Surge Was Just an Illusion

From January 1 to May 6, 2026, the crypto industry completed 305 financing rounds, totaling $8.65 billion. However, the "surge" of $4.57 billion in March was essentially just two mega M&A deals: BVNK's $1.8 billion and Kalshi's $1 billion.

Excluding these two, the real financing pace is about $1 billion per month, which is even weaker than at the end of 2025.

Fund Flow: Payments and Consumer Gobble Up 72%

By sector:

Payments: $3.74 billion (56 deals)

Consumer: $2.48 billion (35 deals)

DeFi: $1.06 billion (47 deals, the highest number of transactions)

The payments and consumer sectors together account for 72% of the year's funding. Financing for gaming and DePIN has almost vanished.

Prediction Markets Dominate the Consumer Sector

The two prediction market companies accounted for 18% of the year's total funding:

Kalshi: $1 billion

Polymarket: $600 million

These two deals total $1.6 billion, exceeding the combined total of all 47 DeFi financing rounds.

M&A Becomes Mainstream

M&A deals reached 48 (23% of known-stage transactions), almost on par with 57 seed rounds (27%). This cycle has shifted from the early stage of investing in new ideas to acquiring industry leaders.

Investor Rankings Reshuffled

Most active funds in 2026:

Coinbase Ventures: 18 deals (Ranked 2nd during 2021-26)

Tether: 13 deals (New top lead investor)

Animoca Brands: 11 deals (Ranked 1st during 2021-26)

GSR: 11 deals

a16z: 7 deals (Significantly down from ~200 deals during 2021-26)

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