Crypto venture capital shifts to traditional logic, focusing on stablecoins and deep tech sectors

On February 9, Bloomberg reported that the plunge in crypto asset prices and the wave of market consolidations have exposed the crypto industry's struggle to build sustainable revenue. Crypto venture capital is now shifting towards the logic of traditional startups, focusing on product-market fit, profitability, and user retention. Some funds have withdrawn from high-risk areas such as NFTs and blockchain gaming, turning instead to stablecoin infrastructure, on-chain prediction markets, fintech, and artificial intelligence. Funds like Mechanism Capital and Tangent have already started investing in robotics startups, signaling a shift in investment focus away from the core crypto sector. Tom Schmidt, partner at venture fund Dragonfly, stated that some funds may face the risk of closure or downsizing.