Crypto venture capital firms are becoming increasingly selective with their investments, moving away from chasing the “next big narrative” and toward projects with proven adoption and sustainable revenue models.

Sylvia To, director at Bullish Capital Management, told Cointelegraph during Token2049 in Singapore that the market has matured beyond the days when funds were poured into every new “Ethereum killer” chain or flashy infrastructure pitch.

“VCs are a lot more careful now. It’s not just a narrative play,” To explained. “Before, you could throw a check at a new L1 and assume it would be the next big thing. But the reality is, many of these chains never reached meaningful adoption.”

A sharper lens on adoption and utility

To said the key question venture capitalists now ask is simple: “Who has been using it?”

She argued that many crypto projects in 2025 have raised funds at valuations disconnected from actual usage, relying instead on optimistic future projections.

“You really have to start thinking — is there enough volume, enough transactions, enough user activity to justify the money being raised? The potential revenue pipeline isn’t solidified in many cases. It’s been a slow year.”

18 crypto projects collectively raised $312 million during the week ending Sept. 29. Source: Messari

Broader shift across the VC landscape

The more cautious approach isn’t unique to Bullish Capital. Eva Oberholzer, chief investment officer at Ajna Capital, told Cointelegraph last month that firms across the sector have adopted stricter investment criteria.

“It’s less about hype and more about predictable revenue models, institutional reliance, and irreversible adoption,” Oberholzer said, describing a noticeable change from the free-spending VC climate of previous cycles.

That caution is reflected in the numbers. According to Galaxy Research, crypto and blockchain startups raised $1.97 billion across 378 deals in Q2 2025 — a 59% decline in funding and a 15% drop in deal count compared to the previous quarter. Overall, venture investment into crypto during the three months ending in June totaled $10.03 billion.

Still, some big-ticket raises highlight the ongoing appetite for high-conviction plays. In May, Strive Funds, founded by entrepreneur and former U.S. presidential candidate Vivek Ramaswamy, secured $750 million to deploy “alpha-generating” strategies via Bitcoin-related purchases.

The takeaway

The shift suggests that crypto VC capital is entering a more disciplined phase, where adoption metrics, revenue visibility, and long-term institutional demand carry more weight than speculative hype cycles.