In a significant shift in the cryptocurrency investment landscape, venture capitalists are adopting a more cautious approach, moving away from the previous trend of speculative investments. Sylvia To, director at Bullish Capital Management, highlighted this evolving strategy during her interview with Cointelegraph at the Token2049 event in Singapore.
“Investors have become noticeably more discerning now,” To stated, emphasizing that the landscape is no longer about chasing the latest buzzword or technology. “Before, you could easily commit capital based on the excitement around new Layer 1 chains with promises of being ‘Ethereum killers.’ But the market has changed significantly since then.”
She pointed out that the crypto ecosystem has grown increasingly fragmented with an influx of new chains and infrastructures, many of which lack user engagement. “Now, the crucial question is, ‘Who is actually utilizing these platforms?’” To explained. “We are at a stage where investors can’t afford to simply gamble on emerging narratives anymore.”
To’s insights painting a dwindling appetite for risk come amid a broader slowdown in funding for crypto startups. Despite a recent surge where 18 crypto projects managed to raise $312 million in the week ending September 29, 2025, the overall investment climate appears to be contracting. The ongoing scrutiny over evaluations and projected future cash flows is reshaping how venture capital approaches funding in this sector.
“There have been numerous projects attempting to raise funds at inflated valuations without substantiating their future earnings potential,” To remarked, noting it has been a slow year for the industry. This trend aligns with findings from a Galaxy Research report, which indicated that crypto and blockchain startups collectively secured $1.97 billion across 378 deals in the second quarter of 2025. This marks a staggering 59% decrease in funding from the previous quarter, coupled with a 15% drop in deal count.
Eva Oberholzer, chief investment officer at Ajna Capital, echoed To’s observations. In a conversation with Cointelegraph, she pointed out that venture capital firms are now more selective than in previous cycles. “The focus is shifting towards predictable revenue models and the assurance of institutional backing,” she said. “Investors are prioritizing tangible metrics of irreversible adoption over speculative hype.”
As the market matures, the approach towards crypto investment is changing, demanding a more analytical lens on profitability and utility. “While the infrastructure in the industry is being developed at an impressive pace, the question remains if there’s sufficient transaction activity to justify the capital influx,” To cautioned.
Looking back at the broader investment trends, venture capital into the cryptocurrency sector has amassed approximately $10.03 billion in the three months ending June 2025—an indication of the continuing investor interest, albeit tempered by a desire for more justified parameters. Strive Funds, led by entrepreneur Vivek Ramaswamy, notably raised $750 million in May to pursue what it terms “alpha-generating” strategies through Bitcoin investments. This may suggest that while there is still interest in crypto, the terms of engagement are evolving towards more sustainable and manageable models.
As the cryptocurrency landscape continues to evolve, the strategies adopted by venture capitalists are reflective of a more mature market environment, where careful consideration and due diligence are prioritized over speculative risks. Investors are now trying to ensure that their investments not only promise future growth but are also backed by current operational viability.
