$4.6 billion: That's how much Web3 startups raised in Q3 2025 alone while altcoins dropped, Bitcoin went flat, and market sentiment hit "extreme fear."

LKI Founder Laura K. Inamedinova - also serving as Chief Ecosystem Officer at Gate.com at the time- moderated a panel at the Global Blockchain Show in Abu Dhabi on December 10, where four leading investors broke down where smart capital is moving in Web3.

Panelists:

1. Akshat Vaidya - Co-Founder and Managing Partner, Maelstrom

2. Catrina Wang - General Partner, Portal Ventures

3. David Gan - Founder and General Partner, Inception Capital

4. Reeve Collins - Co-Founder, Tether 

$4.6 billion raised in Q3, and most of it moved before anyone called the narrative. Vaidya mentioned that he doesn't watch price; he watches what's building: developer activity and protocol metrics. RWAs, DePIN, AI - each had months of signal before they became the obvious trade.

$215M in weekly deal flow during "extreme fear" doesn't add up. Despite Bitcoin trading flat and altcoins under pressure, weekly Web3 fundraising is up 31% week over week and over 60% from a year ago. Wang mentioned that the capital moving right now isn't following price; it's following product. It's going to teams with real user traction solving problems that exist outside crypto. The narrative doesn't matter. The retention does.

USDT up 1.2% in Q4, USDC declining. David Gan highlighted that the market needs three things to move before capital re-enters at scale: stablecoin supply expanding, on-chain volumes climbing, regulatory certainty landing in at least one major market. Right now, none of the three are fully in place.

The next yield frontier is on-chain credit. Collins mentioned tokenized credit and on-chain lending as the areas closest to institutional readiness. Models that require deep liquidity to function aren't ready to absorb serious capital yet. The infrastructure - secondary markets, active market makers, liquid trading venues - needs another 12-24 months before these models can scale.

Regulatory clarity doesn't just reduce risk - it routes capital. MiCA in Europe, VARA updates in Dubai, new stablecoin frameworks in Singapore and Japan - each one is reshaping where institutional money lands in 2026. They're letting institutions test products under regulatory supervision before full compliance is required, and that's what allocators need before they commit.