Crypto VCs: 15 Years to Rule the Galaxy (or Bust)

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Finance

What to know (before your spaceship runs out of fuel):

  • Capital is fleeing to stablecoins, payments, and tokenization like a herd of space lemming escaping a black hole.
  • Venture capitalists are nursing bruises from missed bets (Polymarket, ouch!) and late pivots (NFTs, double ouch!). Lesson learned: conviction is great, but flexibility is the spacesuit you don’t want to forget.
  • Investors are now on a “flight to quality,” backing founders with more experience than a time-traveling robot and revenue streams more reliable than a hyperdrive.

The mood at Consensus Hong Kong wasn’t exactly a galactic retreat, more like a recalibration of the crypto spaceship’s trajectory after a prolonged detour through the asteroid belt of market downturn.

Hasseeb Qureshi, managing partner at Dragonfly (not the insect, the venture capital firm, though they might be just as buzz-worthy), described the current venture market as a “barbell.” On one side, proven verticals are compounding at a scale that would make a Dyson sphere blush. On the other, a narrow set of high-risk, next-generation bets that could either propel us to the stars or leave us floating in the void.

“There’s stuff that’s working, and it’s just like, scale it up, go even bigger,” Qureshi said, pointing to “stablecoins, payments and tokenization in particular.” In a market that’s cooled from speculative excess (think intergalactic tulip mania), these are the sectors still demonstrating product-market fit and revenue, like a reliable starship engine.

On the other side is crypto’s intersection with artificial intelligence (AI). Qureshi is spending time on AI agents capable of transacting onchain, even though “you give an AI agent some crypto, it’s probably going to lose it within a couple days.” The opportunity is as real as a three-headed space alien, but so are the attack vectors and design flaws.

This cautious tone reflects lessons learned the hard way. Qureshi initially dismissed non-fungible tokens (NFTs) as “definitely a bubble,” only to reverse course months later and back infrastructure plays like Blur. That experience, he said, was a reminder to balance conviction with adaptability in fast-moving cycles, like trying to catch a comet with a butterfly net.

Dragonfly also famously missed an early opportunity in prediction market Polymarket. “We were actually his first term sheet,” Qureshi said of founder Shayne Coplan, but passed when a rival fund offered a higher valuation. “Generational miss,” he called it, though Dragonfly later joined a 2024 round before the U.S. election and is now a major shareholder. The takeaway: Thematic conviction, in this case around prediction markets, can take years to pay off, like waiting for a supernova to explode.

Maximum Frequency Ventures’ Mo Shaikh argued that venture success in crypto still hinges on long time horizons. His best thesis, he said, wasn’t a trade but a 15-year bet that blockchain could re-architect financial risk systems. “Have a 15-year timeline,” he advised, urging founders and investors to resist 18-month cycle thinking, which is about as useful as a screen door on a spaceship.

If the venture environment feels tighter, Pantera Capital’s data supports it. Managing partner Paul Veradittakit said crypto VC capital rose 14% year over year, even as deal count fell 42%, evidence, he said, of a “flight to quality.” Investors are concentrating into “accomplished entrepreneurs” and “tangible use cases,” like a space explorer finally finding a planet with breathable air.

After more than a decade fundraising in crypto – from $25 million early funds dominated by family offices to today’s $6 billion platform – Veradittakit sees institutions increasingly driving the next leg. But his advice to founders in a softer market was blunt. “Focus on product, market fit … If there is a token, it’ll naturally come,” he said, like a wise old space captain reminding you not to put the cart before the warp drive.

In a downshifted cycle, the venture message is clear: scale what works, experiment selectively, and don’t confuse narrative with fundamentals. Otherwise, you might find yourself adrift in the vastness of space, wondering where all your crypto went.

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2026-02-11 20:28