Crypto venture capital firms are becoming increasingly cautious, stepping away from impulsive investments tied to fleeting trends, according to Bullish Capital Management’s director, Sylvia To.

“VCs are a lot more careful now. It’s not just a narrative play. Before, you could just throw a check at a new project claiming to be an Ethereum killer,” To remarked during a conversation at Token2049 in Singapore.

To emphasized the fragmentation in the market, stating that numerous new layer 1s and infrastructure have emerged, which she believes are not sustainable anymore.

A Critical Approach is Essential

To voiced the need for a more discerning approach, implying that the focus should shift to the actual usage of new protocols. She stated:

“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?”

She noted that in 2025, many projects are reportedly raising funds at unsustainable valuations, heavily depending on future revenue estimations.

Crypto Projects Funding

18 crypto projects collectively raised $312 million during the week ending Sept. 29. Source: Messari

In the second quarter of 2025, Eva Oberholzer, the chief investment officer at VC firm Ajna Capital, affirmed a similar perspective:

“It’s more about predictable revenue models, institutional dependency, and irreversible adoption.”

According to a recent report from Galaxy Research, funding for crypto and blockchain startups in Q2 2025 dropped by 59% to $1.97 billion, compared to the previous quarter. Nonetheless, venture capital investment into crypto totaled $10.03 billion over the three months leading up to June.

Vivek Ramaswamy, the founder of Strive Funds, was highlighted for securing $750 million for Bitcoin-focused strategies earlier this year.