Crypto VCs Finally Stop Telling the Same Story

Many believe that 加密 VCs are heading towards twilight.

Over the past decade, 加密 VCs have been highly homogeneous—crowding into the same sectors, telling the same stories, and competing for the same projects. While it appears lively, the industry’s internal structure is fragile.

However, what is happening now might be one of the most anticipated moments since the industry’s inception, as the market is experiencing genuine differentiation for the first time.

In late February 2026, two fundraising announcements emerged in succession.

On one side, Dragonfly Capital completed fundraising for its fourth fund, raising $650 million, with a focus on stablecoins, on-chain financial infrastructure, and real-world asset tokenization.

On the other side, Paradigm is seeking up to $1.5 billion for its new fund, expanding its investment scope from 加密 to frontier technology fields like AI and robotics.

Both are top-tier venture capital firms in the 加密 industry, operating in the same downturn cycle. Why have they taken such divergent paths?

Bringing a16z Crypto into the picture makes the question even more interesting, as the firm is reportedly raising $2 billion for its fifth fund recently.

These three funds represent three distinctly different answers given by 加密 VCs today when facing industry challenges.

Hold: The Long-Cycle Logic of a16z Crypto

In the fundraising landscape of 加密 VCs, a16z Crypto has long occupied the top tier. This is the crypto-focused investment arm of Andreessen Horowitz (a16z). Since 2013, it has completed four rounds of fundraising, with a total size exceeding $7.6 billion, making it one of the largest crypto funds globally by capital raised.

Earlier this year, a16z completed a new $15 billion fundraising round spanning infrastructure, application layers, growth funds, and more, listing the intersection of AI and crypto as one of its key investment directions.

According to Fortune magazine, a16z Crypto is raising its fifth fund, targeting approximately $2 billion, with plans to complete the fundraising before the first half of 2026 ends.

a16z Crypto partner Chris Dixon views blockchain as the next foundational architecture of the internet, believing the crypto industry is in a prolonged “foundation-laying period.” Similar to how the 1943 neural network paper relates to today’s AI, true mainstream adoption requires decades of groundwork.

Dixon has publicly stated that a16z Crypto still holds 95% of its historically invested assets because, in venture capital, selling quality assets too early is the worst decision.

The team’s annual crypto industry report consistently signals to limited partners (LPs): even in a bear market, we are still diligently understanding what is happening in this industry.

The LPs a16z Crypto targets are the long-term institutional capital in the crypto fundraising landscape—”old money” with deep conviction in the entire industry.

For them, as long as they still believe crypto has a future, a16z Crypto is the natural choice.

Change: Dragonfly’s Financialization Evolution

Dragonfly was founded in 2018, starting as an early-stage crypto VC bridging Asian and US markets. Its first fund was only $100 million, with its core competitive advantage at the time being the geographic arbitrage ability of its co-founders across the Chinese and American markets.

Since 2019, Dragonfly gradually expanded into secondary markets, began managing liquid capital, and built its own trading team. This not only serves as a risk hedging tool but also provides real-time market data for primary market investments, offering an auxiliary perspective for project evaluation.

In 2022, Dragonfly acquired Metastable, a crypto hedge fund co-founded by Naval Ravikant in 2014, integrating it into its operations. This formed three parallel business lines: Dragonfly Ventures (primary investments), Dragonfly Liquid (liquidity strategies), and Metastable (hedge fund).

The combination of primary VC judgment and secondary market trading capabilities is the core difference between Dragonfly and pure-play primary crypto funds.

However, building this system was not achieved overnight. Establishing an investment system spanning primary and secondary markets means simultaneously constructing two completely different decision-making frameworks, risk control systems, and talent structures—primary requires deep technical judgment for early-stage projects, while secondary demands precise quantitative skills for market microstructure.

In Dragonfly’s previous public job postings, candidates were explicitly required to possess professional skills like delta-neutral hedging and derivatives inventory risk management. Such talent is scarce in the crypto industry, and recruiting from traditional financial institutions requires a lengthy adaptation period.

This trading system is a moat Dragonfly has built over years, and the hardest part for other funds to replicate directly.

Today, Dragonfly is a trading-driven institution spanning primary and secondary markets, with total assets under management (AUM) of approximately $4 billion. Its portfolio includes unicorns like Ethena, Polymarket, and Monad Labs.

However, behind this lies a not-so-optimistic industry trend.

According to RootData statistics, the crypto primary market completed a total of $22.73 billion (excluding Post-IPO and debt financing) in fundraising in 2025, a 120.6% increase from 2024. However, in terms of the number of fundraising events, there were 933 throughout the year, a 40.3% decrease from the previous year, hitting a five-year low, with the monthly number of fundraising events showing an almost unilateral downward trend.

Total fundraising amounts are rising, but the number of projects raising funds is falling, meaning capital is becoming increasingly concentrated, leaving less space for small and medium-sized early-stage projects.

Dragonfly Managing Partner Haseeb Qureshi believes that the past experiments with broad, non-financial crypto applications have been disproven by the market. The new fund will concentrate its bets on stablecoins, DeFi, and on-chain financial services.

He stated that the growth of recent investments like Ethena, Polymarket, Rain, and Mesh illustrates the point: “Crypto’s reach is about to explode, and we want to support the founders at the center of it.”

The LPs Dragonfly targets are those financial institutions that believe in the logic of blockchain financialization, trading-driven allocators, and pragmatic investors towards crypto.

They may not need the grand narrative of crypto changing the world; real liquidity and sustainable trading returns are the answers they seek.

The key to Dragonfly’s path is adapting to the trend. As the crypto industry becomes increasingly financialized, it simply turned this trend into its core competitive advantage earlier than others.

Break: Paradigm’s Boundary Narrative

Paradigm’s story begins with a change in numbers.

In 2021, Paradigm raised $2.5 billion, setting a record at the time for the largest single fundraising round for a crypto fund.

In 2024, its third fund shrank to $850 million.

This time, the target is $1.5 billion, with the investment scope expanding from crypto to AI, robotics, and other frontier technologies.

Paradigm’s core identity is VC plus incubation. Co-founder Matt Huang hails from Sequoia Capital and founded a machine learning startup at age 19, which was acquired by Twitter. The other co-founder, Fred Ehrsam, was a co-founder of Coinbase.

The team’s strength lies in early trend identification and technical risk management. Matt Huang’s collaborator, Stripe founder Patrick Collison, once described him: “He’s calm, rigorous, patient—qualities particularly suited for complex technologies whose impact is deferred.”

Paradigm’s portfolio includes early protocols like Uniswap and Coinbase. These early bets established its industry standing.

Consequently, Paradigm has been described by outsiders as “more like a combination of a research lab and an engineering organization than a traditional VC.”

After the FTX collapse, Paradigm spent three years rebuilding. However, the fundamental issue of scarce high-quality early-stage opportunities in the current crypto industry has not improved. For a fund emphasizing judgment and incubation capabilities, having no good projects to invest in is a more fundamental dilemma than falling market valuations.

Therefore, Paradigm’s pivot to AI is by no means a spur-of-the-moment decision.

In fact, as early as 2023, Paradigm quietly removed Web3-related descriptions from its official website. Matt Huang later explained, stating “AI progress is too interesting to ignore,” and clarified that crypto and AI are not zero-sum; they will have significant overlap. Earlier this year, Paradigm and OpenAI jointly released EVMbench, a benchmark tool for testing whether AI models can identify and patch smart contract vulnerabilities.

According to OECD data, global VC investment in the AI field reached $258.7 billion in 2025, accounting for 61% of total global VC investment, compared to only 30% in 2022.

However, returning to a more practical level, Paradigm’s pivot to AI has more structural reasons.

In the entire crypto VC fundraising landscape, a16z Crypto firmly occupies the top tier of long-term capital, while Dragonfly is the most trading-capable hunter in the financialization track.

Paradigm’s team DNA cannot replicate a16z Crypto’s long-term conviction narrative nor is it suited for Dragonfly’s trading-driven path.

Its team DNA dictates that it can only tell a narrative of fusion innovation, aiming to attract that new capital which no longer favors pure crypto but is still willing to bet on cross-industry technological convergence.

This is the underlying motivation for Paradigm’s current pivot and its only space for differentiation.

Hack VC Managing Partner Alexander Pack (former Dragonfly Managing Partner) stated that both KKR and Bain Capital shifted from pure private equity to credit and public stocks, and a16z has also established funds for various tech sub-sectors. Paradigm’s move, like the industry’s overall trend, signals the firm’s maturation and reintegration into the broader tech field.

Three Paradigms, Three Bets

Placing the three funds together reveals a clear line of logical divergence.

They each answer the same question: During the crypto industry’s downturn, as a fund, what justifies your continued existence?

a16z Crypto’s answer is scale and conviction. Large enough to weather cycles, research deep enough to represent the industry, continuously transmitting confidence to the market.

Dragonfly’s answer is capability and focus. Deeply cultivating crypto financialization, using trading capabilities to compensate for primary market limitations, maintaining capital activity during cycles of project scarcity.

Paradigm’s answer is narrative and breaking boundaries. Using the new story of AI-crypto convergence to attract LPs beyond the reach of traditional crypto VCs, expanding its boundaries from one industry into the larger wave of technological fusion.

Three funds, three responses. No paradigm is the final outcome, and none can be easily replicated—what story can be told is ultimately determined by team DNA.

This might precisely be a sign of crypto VCs maturing. No longer are thousands crowding the same path; instead, each finds the path it can walk. A homogeneous industry is fragile. Only when different species can grow does the market truly come alive.

本文来源于互联网： Crypto VCs Finally Stop Telling the Same Story

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