What are leading crypto VCs really betting on with their three-month haul of $6 billion?

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Author: Azuma, Odaily Planet Daily

The crypto bear market is still ongoing, but some highly significant signals have already appeared in the primary market.

On May 4th, 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 early-stage funds and $500 million to late-stage funds. The focus will be on startups in the cryptocurrency and blockchain space over the next 2 to 3 years, while also expanding into intersecting sectors such as AI Agents, FinTech, and alternative assets.

Just one day later, a16z announced that its fifth crypto fund, Crypto Fund 5, had closed with commitments of $2.2 billion. The fund will continue to focus on the crypto market, targeting segments that are often overlooked during cycle rotations but have the potential to generate long-term value, transforming new infrastructure into products used daily by people.

If we look further back in time, it’s clear this isn’t coincidence but rather a “collective consensus” among top-tier VCs.

In February this year, Dragonfly’s Fund IV completed a $650 million raise; at 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 announced it had raised $125 million; in late April, sources revealed that Blockchain Capital was raising $700 million for two funds… In less than three months, these six VC firms alone have quietly accumulated over $6 billion in capital.

More importantly, this capital was raised not during the market’s hottest period but during a bear market characterized by liquidity droughts in altcoins, declining valuations in the primary market, and persistent industry sentiment downturns. As a16z partner Chris Dixon said, “We are in a relatively quiet phase,” which is not a sign of chasing after a bull market but rather a typical counter-cyclical deployment.

Primary Market Divergence

Focusing solely on the $6 billion raised might lead to the misconception that the primary market is warming up, but the reality is far more complex. Looking at the current survival status of leading and mid-sized VCs, a clear divergence has emerged in the primary market.

For most small and medium-sized VCs, this cycle is proving much more difficult than expected. Due to the continued underperformance of altcoins (almost missing the entire bull run), coupled with tightening liquidity in secondary markets, exit channels are severely constrained, and unrealized gains on paper are gradually shrinking or turning negative as unlocking periods extend. The underperformance of investments directly erodes LP confidence, making it increasingly difficult to raise new funds.

As a result, many small and medium-sized VCs are forced into passive contraction during the bear market: some reduce fund sizes and decrease deal frequency; others shift to pure secondary funds; some simply exit the market altogether. Many VCs that gained high visibility during the last bull cycle have now disappeared from the market.

In stark contrast, the top-tier VCs that continue to raise large funds are showing structural advantages. Although their investment pace has slowed with the market downturn, their dominant position in the primary market is actually strengthening due to structural advantages.

These advantages include: first, top-tier VCs often have stronger resource monopolies, enabling them to more effectively capture rare high-quality projects (examples include a16z and Paradigm backing Kalshi, Dragonfly and ParaFi backing Polymarket, Blockchain Capital investing in Coinbase and Circle); second, they can cover a broader investment cycle—from early stages like pre-seed and seed to later stages like Series A and B—creating more opportunities for follow-on investments or amplified returns; third, they have greater room for trial and error, with larger asset management scales allowing them to withstand higher failure rates and bet on longer-term narratives; fourth, their brand influence grants them stronger bargaining power, often securing more favorable terms even within the same funding round.

This structural difference in advantages ultimately leads to market divergence, with the Matthew effect becoming more pronounced—while in a bull market, small and medium-sized VCs could potentially turn the tide with a few lottery-like investments, in a bear cycle, this trend will only become more evident.

What Are These $6 Billion Looking At?

According to disclosures from these six VC firms, the newly raised $6 billion is allocated across the following sectors and directions.

Dragonfly: bullish on crypto financialization, focusing on stablecoins, prediction markets, Agent payments, on-chain privacy, and real-world asset tokenization.

Paradigm: expanding beyond crypto into AI, robotics, and other frontier tech fields.

ParaFi: stablecoins, asset tokenization, institutional-grade on-chain financial products.

Blockchain Capital: focusing on early-stage and growth-stage crypto startups.

Haun Ventures: optimistic about next-generation financial infrastructure, including stablecoins, asset tokenization, prediction markets, and Agent economy.

a16z: mentioning stablecoins, DeFi, prediction markets, asset tokenization, and other financial infrastructure, while believing that in the era of AI explosion, the inherent features of crypto networks can still be used to address transparency and verifiability issues in software.

When looking at the public statements of these six VCs collectively, it’s clear that although their focus areas differ slightly, their overall direction has become quite convergent.

The most core consensus is undoubtedly centered around next-generation on-chain financial infrastructure represented by stablecoins, asset tokenization (RWA), prediction markets, and on-chain payments. Whether it’s Haun Ventures, a16z, Dragonfly, or ParaFi, these keywords are repeatedly emphasized in their new fund directions. To some extent, this also indicates a shift in the investment logic of the crypto industry. Compared to the previous cycle, which was more driven by sentiment, this cycle’s top-tier VCs are more focused on infrastructure projects that have already demonstrated real demand and have the potential to sustain long-term traditional financial flows.

In addition, top-tier VCs are increasingly investing in AI-related areas. Paradigm has explicitly stated it will allocate some funds to AI and robotics, while Haun Ventures and Dragonfly have also mentioned Agent-related directions. The reason behind this trend is straightforward: on one hand, AI has become the most certain mainline in the global tech industry today, and top VCs cannot afford to be absent; on the other hand, the crypto industry is also trying to prove that it is not just a marginalized narrative under the AI boom but can become part of the underlying infrastructure of the AI era—especially as the Agent economy rises, the original openness, composability, and permissionless features of crypto networks are beginning to reassert their value.

Bear Market Fundraising: Betting on the Next Cycle

For VCs, the bear market is often the stage that truly determines future patterns.

While bull markets make fundraising easier, project valuations tend to be higher, and entry barriers are steeper. Only during periods of low market sentiment, liquidity droughts, and industry narrative failures can VCs leverage their judgment to capture excess returns.

Looking back at previous cycles, bear markets do not kill high-quality projects but instead accelerate market reshuffling, allowing “gold to shine faster.” That’s why, even amid persistent industry gloom, top-tier VCs continue to raise funds counter-cyclically.

Because what they are truly betting on is not “now,” but who will become the new Circle, the new Hyperliquid, the new Polymarket after the next cycle begins.