Crypto venture capitalists are dialing back their risk appetite, avoiding the hot flavor of the month and applying a more critical lens to investments, according to Bullish Capital Management director Sylvia To.
“VCs are a lot more careful now. It’s not just a narrative play. Before you could throw a check and say, Oh, there’s another L1 but it’s going to be an Ethereum killer,” To told Cointelegraph during a sit-down interview at Token2049 in Singapore.
“Then subsequently, you saw all these new chains forming,” she said, explaining that the market became fragmented and a lot of funds were being deployed to new layer 1s and new infrastructure, which isn’t viable anymore.
“Who has been using it?” is the crucial question, says To
“We’re at a phase where you don’t have that luxury to just bet on these new narratives,” she said, adding that investments now require a much more critical lens.
“You really have to start thinking, there’s all this infrastructure being built in the industry, but who has been using it? Are there enough transactions? Is there enough volume coming through these chains to justify all the money being raised?”
To said that in 2025, many projects have been raising funds at inflated and often unjustified valuations, relying heavily on future cash flow projections.
18 crypto projects collectively raised $312 million during the week ending Sept. 29. Source: Messari
“The potential revenue and the pipeline they’ve got aren’t solidified,” To said, adding that it has been “a slow year.”
Crypto startup funding declined in Q2 2025
Eva Oberholzer, the chief investment officer at VC firm Ajna Capital, recently echoed a similar sentiment to To.
Oberholzer told Cointelegraph on Sept. 1 that VC firms have become much more selective with the crypto projects they invest in, representing a shift from the previous cycle due to market maturation.
“It’s more about predictable revenue models, institutional dependency, and irreversible adoption,” Oberholzer said.
Related: Crypto VC firm Archetype closes $100M early-stage fund
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