Crypto venture capitalists are more cautious now, steering clear of fleeting trends and taking a more analytical approach to investments, as noted by Bullish Capital Management director Sylvia To.
“VCs are considerably more prudent. It’s no longer just about enticing narratives. Previously, it was easy to invest saying, ‘Here’s another L1; it’s going to rival Ethereum,’” To told Cointelegraph during an interview at Token2049 in Singapore.
“Then, we witnessed a surge of new chains,” she said, explaining how the market fragmented with numerous funds directed towards new layer 1s and infrastructures, which is no longer sustainable.
“Who has been using it?” is the essential question, according to To
“We’re in a stage where betting on new narratives isn’t a luxury anymore,” she emphasized, noting that investments now necessitate a more discerning approach.
“You must start questioning the validity, as all this infrastructure develops in the industry. Who has been using it? Are there sufficient transactions? Is the volume through these chains enough to justify the funds being raised?”
To mentioned that by 2025, many projects had been acquiring funds at inflated, often unwarranted valuations, heavily relying on prospective cash flow estimates.
“The projected revenue and the pipeline aren’t solidified,” To stated, mentioning that it has been “a slow year.”
Crypto startup funding dipped in Q2 2025
Eva Oberholzer, chief investment officer at VC firm Ajna Capital, recently expressed similar views to To.
Oberholzer stated to Cointelegraph on Sept. 1 that VC firms have become far more discerning regarding crypto projects, marking a shift from the last cycle due to market evolution.
“It’s increasingly about predictable revenue models, institutional dependence, and irreversible adoption,” Oberholzer stated.
Related: Crypto VC firm Archetype closes $100M early-stage fund
According to Galaxy Research’s latest VC report, crypto and blockchain startups raised a total of $1.97 billion across 378 deals in Q2 2025, reflecting a 59% drop in funding and a 15% decline in deal count compared to the previous quarter.
Overall, total venture capital investment in crypto reached $10.03 billion over the three months ending in June.
Leading the way, Strive Funds, an asset manager launched by American entrepreneur and politician Vivek Ramaswamy, secured $750 million in May to create “alpha-generating” strategies through Bitcoin-related purchases.
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