Cryptocurrency VC collectively boosts presence, is the market starting to bottom out and rebound?

Author: Gu Yu, ChainCatcher

After a long period of silence, cryptocurrency VC has recently become a hot topic of discussion, with many industry professionals posting and engaging on the X platform, with individual posts reaching over 1.41 million views.

The earliest discussion came from Tom Dunleavy, the investment director at Varys Capital, who stated in a post on April 11 that the shift in the cryptocurrency fundraising landscape is simply insane.

"Crypto VCs used to have to constantly promote their investment theses through articles, podcasts, Spaces, etc., and take 10 deal flow calls each week just to secure good projects... now, it’s almost enough to just have capital to write checks," Tom Dunleavy said. "Currently, there are fewer than 20 institutions that are actually writing checks for pre-seed/seed rounds. VCs can basically pick any projects they want and have more time for due diligence."

A wave of sentiment was stirred, and the precise and dramatic description quickly resonated with a large number of crypto VC investors, with nearly half of the crypto VC circle commenting on this tweet.

Crypto VCs Actively Participate in Discussion

The collective sentiment among VCs is not unfounded. Over the past few years, as many narratives have been debunked, numerous once highly valued startups have faltered. Just this year, many projects with star VC backgrounds, such as Tally, MilkyWay, and Colony, have announced shutdowns, and the investment amount in the primary market of the crypto industry has continued to decline.

There are many interpretations behind the contraction of the crypto VC market, such as the overall weakening of cryptocurrency markets, difficulties in fundraising for crypto VCs, and a lack of technological innovation and new narratives, which have led to a shift in the primary market from "scrambling for projects to picking projects."

Haseeb Qureshi, managing partner at Dragonfly, offered a different perspective on the reasons for the weakening crypto VC market. "Cryptocurrency is harder now because it is thriving, with more mature and larger companies and products emerging. This makes it harder for existing businesses to be shaken. Coinbase, Binance, Solana, Base, Polymarket, Circle, Tether—these are all larger, stronger, and more stable than they were a few years ago. This is an inevitable trend in the industry's development."

"At this stage, you must attack strong competitors to claim territory, rather than just planting a flag in open land. While there are still some undeveloped areas, there will always be truly innovative people who can shine. But the competition in the cryptocurrency field is much fiercer now, which means that creativity needs to be more sophisticated, teams need to be stronger, and the barriers to entry are naturally higher than they were a few years ago," Haseeb Qureshi believes.

Due to the high attention on this tweet, investors from at least 30 crypto VCs, including Coinfund, 1kx, Greenfield Capital, Blockchain Capital, Lattice, Big Brain Holdings, Frachtis, Maximum Frequency, ether.fi Ventures, and Hashgraph Ventures, stated that they are still actively deploying funds and looking for quality projects to invest in.

"The first quarter of 2026 is the busiest quarter. Varrock has added 3 investments. Typically, we only make 0 to 1 new investment each quarter (the portfolio is small and concentrated)," said Richard Chen, founder of Varrock and former general partner at 1confirmation.

However, attitude is one thing, and action is another. At least at this stage, there are still no signs of recovery in the crypto VC market on a data level, and the strategic changes of a few VCs have a negligible impact on the entire crypto market. Several KOLs even believe that this collective statement is more like a performance.

"In fact, they themselves cannot raise any funds. Many smaller venture capital firms have gone bankrupt or failed to successfully raise a new round of funds. This carefully orchestrated public performance is just cheap PR left for future generations, in case we fall into trouble again," @0xdasha said somewhat sarcastically.

VC Development Status from a Data Perspective

According to RootData's financing database, in the past year, only 10 VCs have publicly participated in investment rounds more than 20 times, and only 43 VCs have participated more than 12 times. Among them, Coinbase Ventures, YZi Labs, Animoca Brands, Pantera Capital, Andreessen Horowitz, GSR, Amber Group, Paradigm, and Galaxy rank in the top ten.

If the threshold for investment quantity in the past year is lowered to 2, at least 230 crypto VCs meet the requirements, accounting for over 20% of all VCs. This means that although many VCs are still active, they still make fewer than 5 investments each year.

So far this year, only 11 VCs have publicly participated in investment rounds more than 5 times. Among them, the stablecoin issuer Tether and Animoca are tied for second place, having invested in 8 projects including Ark Labs, Utexo, Axiym, Dreamcash, LayerZero, t-0 Network, Gold.com, and Anchorage.

Taisu Ventures ranks third in investment rounds, having invested in 6 projects including GoSats, Unitas, and Zoth, becoming a dark horse among crypto VCs.

According to statistics, many crypto VCs have seen a significant decline in the number of investments over the past year. The Spartan Group, Fenbushi Capital, IOSG Ventures, SevenX Ventures, Multicoin Capital, Foresight Ventures, P2 Ventures, Lemniscap, Folius Ventures, and ConsenSys Mesh have all made fewer than 5 investments in the past year, while their cumulative investment counts previously exceeded 100.

In terms of fundraising, RootData has recorded that 21 crypto VCs have disclosed the completion of specialized crypto fund fundraising in the past year, and this year, four crypto VCs—ParaFi Capital, Hash Global, EV3, and Dragonfly—have publicly completed fundraising.

At the same time, many VCs are beginning to develop diversified investment strategies, expanding their reach into the AI field on one hand, and investing more funds in the crypto secondary market and stock market on the other, to achieve more certain investment returns.

For a long time, the crypto VC industry has been criticized for deliberately inflating valuations and randomly crashing markets. A shake-up in the crypto VC market is inevitable, which is also a necessary process for the industry to enter a new stage of development.

Behind those "active statements" on the X platform, who are the true bottom fishers, and who are the "zombie institutions" struggling on the fundraising line, time will soon provide the answer.