Venture capital (VC) firms are now more discerning about the crypto projects they choose to invest in, marking a notable change from prior cycles, as stated by Eva Oberholzer, the chief investment officer at VC firm Ajna Capital.
“It’s more challenging now because we’ve entered a different phase in crypto, akin to previous technological cycles,” Oberholzer mentioned to Cointelegraph.
She noted that the maturation of the market has reduced pre-seed funding, shifting VCs’ focus toward established projects with solid business models. Oberholzer explained:
“The focus has shifted to predictable revenue models, institutional reliance, and permanent adoption. Currently, crypto is not fueled by memecoin crazes or fleeting trends; it’s about institutional acceptance.”
This change in VC engagement mirrors the wider trend of institutional investment in crypto, emphasizing revenue-generating digital asset ventures rather than speculative pricing that characterized earlier crypto cycles, including the 2021 bull market.
Related: VC Roundup: Bitcoin DeFi surges, but tokenization and stablecoins gain momentum
The traditional financial world seeks yield and revenue-generating crypto businesses
Investors from traditional finance, including Wall Street firms, venture capitalists, and institutional funds, are increasingly looking for crypto projects that deliver established, reliable revenue streams.
VC firms are focusing on stablecoin initiatives and other payment infrastructure that can accrue fees, according to Oberholzer.
Real-world asset tokenization (RWA) platforms are also attracting the attention of VC firms, thanks to the revenue potential of minting and managing tokenized RWAs on-chain.
Matt Hougan, the chief investment officer (CIO) at investment firm Bitwise, recently shared with Cointelegraph that the pursuit of yield is motivating Wall Street to invest in Ether (ETH).
“If you take $1 billion of ETH and invest it in a company where you stake it, you’re suddenly producing earnings. Investors are accustomed to companies that do just that,” Hougan stated.
The smart contract layer-1 blockchain is home to most stablecoin, RWA market, and decentralized finance (DeFi) activities that create consistent revenues through fees and other financial mechanisms for their holders.
Magazine: TradFi is building Ethereum L2s to tokenize trillions in RWAs: Inside story
