Crypto venture capital firms are adopting a more cautious approach by meticulously assessing investments rather than merely jumping on trendy narratives, as stated by Sylvia To, a director at Bullish Capital Management.

“VCs are a lot more careful now. It’s not just a narrative play. Before, it was easy to support any new Layer 1 blockchain with the hope that it would outperform Ethereum.”

To further elaborated on the fragmentation of the market due to numerous new chains, indicating that the era of quickly deploying funds toward new infrastructures is fading. Now investors are confronted with fundamental questions about usage and transaction volumes pertaining to new technologies.

“Who has been using it?” is the crucial question

“You really have to start thinking, there’s all this infrastructure being built in the industry, but who has been using it? Are there enough transactions? Is there enough volume coming through these chains to justify all the money being raised?”

To stated that 2025 has seen projects raising funds at inflated valuations predicated mainly on anticipated future earnings. Her perspective aligns with that of Eva Oberholzer, Chief Investment Officer at Ajna Capital, who noted that the current investment landscape demands a shift towards more predictable revenue models and significant institutional support.

In Q2 of 2025, venture capital investments in crypto saw a significant drop, raising only $1.97 billion from 378 deals, representing a 59% decrease in funding compared to the previous quarter.

Strive Funds, led by Vivek Ramaswamy, successfully raised $750 million to design innovative strategies utilizing Bitcoin in May, showcasing continued interest among established financial entities despite market hesitance.