Author: Azuma, Odaily Planet Daily
The cryptocurrency bear market continues, but some highly significant moves have emerged in the primary market.
On May 4, Haun Ventures, a venture capital firm founded by former U.S. federal prosecutor Katie Haun, announced the completion of a $1 billion fundraising round, with $500 million allocated to its early-stage fund and $500 million to its late-stage fund. Over the next two to three years, the firm will primarily invest in startups in the cryptocurrency and blockchain sectors, while also expanding into intersecting areas such as AI agents, fintech, and alternative assets.
Just one day later, a16z announced that its fifth cryptocurrency fund, Crypto Fund 5, has completed fundraising with $2.2 billion in committed capital. The fund will continue to focus on the cryptocurrency market, targeting areas often overlooked during market cycles but best positioned to generate long-term value—transforming next-generation infrastructure into products people use every day.
If you go further back in time, you’ll see this isn’t a coincidence, but rather a “collective consensus” among top VCs.
In February, Dragonfly’s Fund IV raised $650 million; by the end of February, multiple media outlets reported that Paradigm was seeking to raise up to $1.5 billion for its next fund; in March, ParaFi officially announced the completion of a $125 million raise; and in late April, sources revealed that Blockchain Capital was raising $700 million for two of its funds... In less than three months, just these six VC firms have quietly amassed over $6 billion in capital.
More importantly, this round of funding did not occur during the peak of market enthusiasm, but rather during a bear market characterized by depleted altcoin liquidity, declining valuations in the primary market, and sustained industry pessimism. As a16z partner Chris Dixon said, “We are in a relatively quiet phase”—this is not a momentum-driven move fueled by bull market sentiment, but a classic counter-cyclical investment strategy.
The primary market is becoming increasingly differentiated.
Focusing solely on the $6 billion raised may create the illusion that the primary market is recovering, but the reality is far more complex. Examining the current survival conditions of top-tier and mid-to-small-sized VCs reveals a clear divergence in the primary market.
For most mid- and small-sized VCs, this cycle has been far more challenging than anticipated. Due to the prolonged underperformance of altcoins (nearly missing the entire bull market) and tightening liquidity in the secondary market, fund exit channels have been severely restricted, causing apparent positive returns to gradually shrink—or even turn negative—over extended lock-up periods. Underwhelming investment returns have directly eroded LP confidence, making fundraising for new funds increasingly difficult.
As a result, we see that most mid- and small-sized VCs have been forced into passive contraction during the bear market: some have reduced fund sizes and lowered investment activity; others have transitioned into pure secondary funds; and some have completely exited the market. Many mid- and small-sized VCs that were highly visible during the previous bull market have now vanished from the scene.
In stark contrast are the top-tier VCs that continue to raise substantial funds. Although their investment pace has slowed somewhat due to the bearish market, their structural advantages are actually strengthening their dominance in the primary market.
Regarding so-called structural advantages: First, top-tier VCs often possess stronger resource monopolization capabilities, enabling them to more effectively secure rare high-quality projects (e.g., Kalshi’s investors include a16z and Paradigm, Polymarket’s include Dragonfly and ParaFi, and Blockchain Capital invested in Coinbase and Circle). Second, top-tier VCs can cover a more comprehensive investment lifecycle—from early-stage pre-seed and seed rounds to later-stage Series A and B—offering more opportunities to join later rounds or amplify returns. Third, top-tier VCs have greater room for error; larger asset under management allows them to tolerate relatively higher failure rates and bet on longer-term narratives. Fourth, the brand power of top-tier VCs translates into stronger negotiating leverage, often securing more favorable terms than smaller or mid-sized VCs even within the same funding round.
This structural imbalance in advantages and disadvantages ultimately leads to market divergence, with the Matthew effect becoming increasingly evident—during a bull market, smaller VCs may still achieve an upset through a few lottery-like investments, but during a bear market, this trend will only become more pronounced.
What are these $6 billion looking at?
According to disclosures from these six VCs, the newly raised $6 billion will be allocated across the following sectors and initiatives.
- Dragonfly: Bullish on the trend of crypto financialization, with particular emphasis on stablecoins, prediction markets, agent payments, on-chain privacy, and tokenization of real-world assets;
- Paradigm: Expanded beyond encryption to include AI, robotics, and other cutting-edge technologies;
- ParaFi: Stablecoins, asset tokenization, institutional-grade on-chain financial products;
- Blockchain Capital: Focused on early-stage and growth-stage cryptocurrency startups;
- Haun Ventures: Bullish on the next generation of financial infrastructure, including stablecoins, asset tokenization, prediction markets, and the agent economy;
- a16z: Highlights financial infrastructure such as stablecoins, DeFi, prediction markets, and asset tokenization, while asserting that the inherent properties of crypto networks remain applicable to addressing software transparency and verifiability in the era of AI's explosive growth.
When combining the public statements from six VCs, it is evident that although some differences in emphasis remain, their overall positions have clearly converged.
The most core consensus is undoubtedly the next generation of on-chain financial infrastructure, represented by stablecoins, asset tokenization (RWA), prediction markets, and on-chain payments. Whether Haun Ventures, a16z, Dragonfly, or ParaFi, all have repeatedly mentioned these keywords in the direction of their new funds. To some extent, this also signifies a shift in the investment logic of the crypto industry. Compared to the previous cycle, which was driven more by sentiment, this round of top VCs is placing greater emphasis on infrastructure projects that have already demonstrated real demand and have the potential to sustainably capture traditional financial traffic over the long term.
In addition, leading VCs are significantly increasing their investments in AI-related areas: Paradigm has explicitly stated it will allocate part of its funds toward AI and robotics, while Haun Ventures and Dragonfly have also highlighted agent-related initiatives. The rationale behind this trend is straightforward: on one hand, AI has become the most definitive theme in today’s global tech industry, and top VCs cannot afford to miss it; on the other hand, the crypto industry is striving to demonstrate that it is not merely an outdated narrative sidelined by the AI boom, but rather a potential foundational layer of the AI era—especially as the agent economy gains momentum, the inherent openness, composability, and permissionless nature of crypto networks are beginning to regain their value.
Raising funds in a bear market is essentially betting on the next cycle.
For VCs, the bear market is often the true turning point that shapes the future landscape.
Although capital is easiest to raise during a bull market, project valuations and entry barriers tend to be higher as well. Only when market sentiment is weak, liquidity is scarce, and industry narratives lose their appeal do VCs truly gain amplified opportunities to generate excess returns through superior judgment.
Looking back at previous market cycles, bear markets do not eliminate truly high-quality projects; instead, they accelerate market consolidation, allowing the "gold to shine faster." This is why, even amid today’s continued market pessimism, top VCs are still raising substantial funds counter-cyclically.
What they are truly betting on is not “now,” but who will become the next Circle, the next Hyperliquid, the next Polymarket after the next cycle begins.