I noticed an interesting trend — large crypto funds are massively reducing their managed assets. I recently saw SEC data showing that even top players like Paradigm and Pantera didn't avoid AUM declines last year. But here’s the thing: this isn’t always a bad sign.

Let’s figure it out. a16z crypto, for example, deliberately started distributing income to investors at the market peak. Their first fund showed a DPI of 5.4x — that’s a serious result. Assets fell by 40%, but that’s because they simply returned money to LPs after good earnings. It’s a completely different situation.

Multicoin — that’s where it’s really more complicated. Over the year from 2024 to 2025, their AUM dropped more than in half to $2.7 billion. This directly reflects the volatility of the crypto market. When BTC started falling in October, all altcoins crashed along with it. Multicoin’s structure, managing both a hedge fund and a venture fund simultaneously, was hit especially hard.

Pantera also experienced reductions, but they had compensation — five portfolio companies went public, including Circle and BitGo. This brought in a significant influx of cash.

And then there’s Haun Ventures — the only one that showed growth during this period. Their AUM increased by more than 30% to $2.5 billion. A successful bet on stablecoins helped: their investment in BVNK was acquired by Mastercard for nearly $1.8 billion. Plus, they attracted a new fund of a billion dollars themselves.

The most interesting thing — despite the reduction in assets, large crypto funds aren’t sitting idly. Paradigm is raising a new fund of up to $1.5 billion, a16z crypto — up to $2 billion, Dragonfly just closed its fourth fund at $650 million. Clearly, they see an opportunity in the bear market for the next cycle.

What amazes me is the cyclicality of crypto venture capital. Multicoin grew by 20,287% from 2017 to 2021, then fell 90% in 2022. You don’t see that in traditional venture capital. It’s a crypto fund-specific feature: their portfolios are directly tied to token prices, not company stocks.

Now, it seems, a new round is beginning. Strategies are diverging: a16z continues to bet everything on blockchain, while Paradigm is diversifying into AI and robotics. It’s interesting to watch how large crypto funds adapt to cycles.