From Utopian Narratives to Financial Infrastructure: The “Disenchantment” and Shift of Crypto VCs

Original Compilation: Saoirse, Foresight News

Not long ago, the криптовалюта industry was chanting the slogan “blockchain, not Bitcoin,” claiming that distributed ledger technology would transcend financial applications and completely reshape the internet. However, recent funding trends indicate that in the real world, cash is still king.

Since the Web3 and NFT frenzy subsided in the early 2020s, investment enthusiasm in the crypto industry has noticeably cooled. Yet, one niche area has bucked the trend, attracting increasing venture capital—stablecoin payments.

Stripe’s $1.1 billion acquisition of Bridge last year was an early signal of traditional financial institutions beginning to position themselves in stablecoin payments. Since then, a batch of startups including ARQ, KAST, and RedotPay have successively secured new funding to build cross-border payment channels and stablecoin-based financial services. Mastercard’s $1.8 billion acquisition of BVNK last week further confirms the market’s strong interest in this track.

“Startups related to stablecoins are almost the hottest area for VC funding right now,” said Rob Hadick, General Partner at Dragonfly Capital. “Stablecoins have separated from the entire crypto industry to become one of the few truly breakthrough applications achieving widespread real-world adoption.”

According to data from Architect Partners, which focuses on annual crypto financing reports, the total funding for crypto payment companies soared to $2.6 billion in 2025, exceeding the sum of the previous three years. Driven by Mastercard’s acquisition of BVNK, this figure is expected to continue climbing this year.

Crypto Payment Infrastructure Funding: 2025 funding per company exceeded the total of the previous three years

Meanwhile, overall private funding in the crypto industry increased from nearly $13 billion in 2024 to $20.4 billion in 2025, but still remained below the peak of $27.6 billion in 2022.

Total Funding for Cryptocurrency Companies: The number of crypto financing deals rose last year but still hasn’t reached the 2022 peak.

Currently, the two areas with the most concentrated private funding are “Investment & Trading Infrastructure” and “Brokers & Обменs,” both being financial application businesses. Payment infrastructure firmly holds the third position. In stark contrast, the blockchain gaming sector, once at the core of the Web3 and NFT frenzy, saw its funding drop from $3.76 billion in 2022 (about 14% of total funding) to the point where it was no longer listed as a separate statistical category by 2025.

In fact, various decentralized applications (Web3 functional layer) collectively raised $5.2 billion in 2022; whereas in the 2025 report, only the consumer DApp category remained, with funding of just $864 million.

Funding Across Cryptocurrency Subsectors: Payments ranked among the top three sub-sectors attracting funding in 2025

Stablecoins are building more robust financial infrastructure for blockchain. These tokens are typically pegged 1:1 to the US dollar, with their value tied to underlying assets. Driven by the Trump administration’s pro-crypto policies, market enthusiasm for stablecoins reached unprecedented heights last year.

According to Artemis Analytics data, the total transaction volume of stablecoins surged 72% in 2025, reaching $33 trillion. The two largest stablecoins by market size are currently Tether’s USDT and Circle’s USDC.

Circle’s stock price experienced its largest single-day drop on Tuesday, as investors assess potential adjustments to US stablecoin regulation and the impact of intensifying industry competition. However, the core appeal of stablecoins remains clear: moving money as efficiently as possible.

Cross-border payments remain slow, costly, and capital-intensive. Despite years of fintech development, cross-border transfers still heavily rely on prefunded accounts in different jurisdictions.

“Stablecoins have completely changed this landscape,” said Prajit Nanu, Co-founder and CEO of cross-border payments company Nium. “They enable value to move globally in real-time without the same degree of capital efficiency loss, which is why investors see them as the core infrastructure for the next generation of payments.”

This industry still has powerful “gatekeepers.” Major payment networks like Visa and Mastercard control access to payment terminals. Eric F. Risley, Founder and Managing Partner of Architect Partners, wrote in the report that the channel distribution issue “is the bane of every stablecoin and related payments company.”

Binance Spot Trading Рынок Share Trend Chart

As of February this year, Binance’s share in Bitcoin spot trading had fallen to 27%, and its share in all-coin trading dropped from 52% to 32%. Its most profitable derivatives business also saw a significant decline in share, dropping to 34%.

Franklin Templeton partnered with Ondo Finance to launch ETF tokenization products, which can be traded 24/7 via crypto wallets, bypassing the brokerage accounts and time-limited trading rules that fund investments have relied on for decades.

Industry Voices

“The irony of holding this event in Las Vegas right now is just palpable,” said Ben Johnson, Head of Client Solutions at Morningstar, bluntly stating that this industry “has completely crossed the line between investing and gambling, with no room for turning back.”

ETFs, originally created to simplify investing, have now become the vehicle for America’s latest form of financial gambling. Bloomberg Intelligence data shows that of the 1,000 new funds launched last year, 36% were leveraged products or crypto-related funds.

Эта статья взята из интернета: From Utopian Narratives to Financial Infrastructure: The “Disenchantment” and Shift of Crypto VCs

Related: Full Interview with Kalshi Founder: Regulation, Litigation, and $20 Billion—Why We Chose the “Hardest Path”

Compiled by: Peggy, BlockBeats Editor’s Note: Over the past few years, prediction markets have gradually moved from a relatively niche financial experiment to the center of discussions on technology, finance, and public policy. The reason for this widespread attention is not only the inherent appeal of “betting on the future,” but also because, against a backdrop of social media amplifying noise, frequent polling inaccuracies, and declining credibility of traditional information systems, a more fundamental question has emerged: Could market prices become a signal mechanism closer to reality than opinions, emotions, and narratives? This conversation revolves precisely around this question. Participants include Stripe co-founder John Collison, Paradigm co-founder Matt Huang, and Kalshi’s two co-founders, Tarek Mansour and Luana Lopes Lara. Kalshi’s two co-founders Tarek Mansour (right) and Luana Lopes Lara (left)…