Crypto venture capital firms are struggling to raise new funds, with major firms pivoting away entirely and half of Paradigm’s team departing in two months.
The VC Fundraising Crisis
Commitments to crypto VC funds remain at historic lows and didn’t recover during Bitcoin‘s (CRYPTO: BTC) generational bull run, according to crypto founder Miya.
Miya, who runs crypto hedge fund operations, spoke to numerous VCs—both traditional finance and crypto-focused—in the past month.
Close to nobody was optimistic about raising for another crypto fund. “Crypto as we know it is over,” Miya wrote.
While risk appetite inside venture capital has been off the charts for other sectors over the last three years, blockchain received only outflows.
The frontier of technology has moved to AI and robotics, leaving blockchain behind.
Why “Fixes” Won’t Work
Miya dismissed popular proposed solutions like ownership coins that give governance rights to token holders.
“No talented young founder will choose to give anonymous tokenholders full control of their business,” she wrote, calling it “a band-aid of complacency.”
The core problem: Blockchain has moved from the frontier of technology to an “un-investable asset class building products nobody needs.”
VCs left in the space are trying to manufacture narratives and fund whatever’s hot, only to be left holding worthless tokens after three-year vesting periods end.
Crypto is now seen as “the weird industry you enter to build something meaningless for exit liquidity”—essentially pump-and-dump schemes rather than genuine innovation.
The Paradigm Exodus
Half of Paradigm’s team quit in the last two months, according to Miya.
Entire firms silently exited everything, with major players like Mechanism and Tangent literally pivoting away from crypto entirely.
The timing exposes the problem. If crypto VCs can’t raise funds during Bitcoin’s move from $16,000 to $120,000, when can they?
The answer suggests never—at least not under the current model where altcoins and blockchain infrastructure projects dominate portfolios.
The Proposed Solution
Miya argues the industry needs to stop trying to put everything on blockchain and return to reality.
Instead of forcing traditional businesses onto decentralized networks, the focus should shift to bringing token economics to regular web2 tech companies.
Rather than building a decentralized version of Uber on blockchain that nobody uses, create tokens that give ownership or revenue sharing in the actual successful Uber.
Apply token economics to companies that already work instead of rebuilding everything from scratch on blockchain.
The path forward involves moving toward AI and robotics—where real innovation is happening—rather than trying to recreate those technologies inside crypto.
Image: Shutterstock
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