On August 25, CoinWorld reported that industry insiders revealed that since the collapse of Terra (LUNA) and FTX in 2022, the scale of financing for cryptocurrency venture capital has significantly shrunk as LPs have become more cautious. Cryptocurrency venture capital is now competing for capital inflows with ETFs and DATs. Data from The Block Pro shows that in 2022, 329 funds raised over $86 billion, but this number plummeted to $11.2 billion in 2023 and is projected to be $7.95 billion in 2024. By 2025, 28 funds raised only $3.7 billion. The amount raised and the number of funds have both shown a significant downward trend, reflecting stricter capital selection by limited partners. Although family offices, wealthy individuals, and crypto-native funds remain active in the cryptocurrency venture capital space, these institutions have significantly withdrawn their investments since 2022. Smaller, well-funded funds with less than $50 million may have a chance of survival, as may larger funds like Paradigm and a16z. However, medium-sized crypto funds may be hollowed out and eventually disappear.

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