The artificial intelligence boom is syphoning money away from crypto startups, venture capitalists warn.

Charles Chong, vice-president of strategy at crypto advisory firm BlockSpaceForce, told DL News that investors have “real alternatives with faster revenue visibility.”

“Crypto teams need to work harder,” he said. “That’s pushing founders to be more precise about defensibility, monetisation, and how their models hold up in a slower market.”

Chong’s words of caution come as crypto startups raised $128 million in the first week of March, DefiLlama data shows. That brings the total amount raised in 2026 to nearly $2.5 billion so far.

Still, this week’s investors include the likes of Peter Thiel’s…