Top crypto VC managing $12 billion saw its new fund shrink by half, but investment directions doubled.

Paradigm's fourth fund raised $1.2 billion, more than halved from the $2.5 billion fund in 2021 and $300 million less than the originally planned $1.5 billion. But investment scope expanded from just crypto to AI, robotics, space, energy, and deep tech. Less money, more tracks.

Looking at the whole industry, global venture capital in the first half reached a record $510 billion, while crypto only got $10.8 billion, less than 2.5% of the total. OpenAI and Anthropic alone accounted for over 40%.

AI funding exploded while crypto investment shrank, and Paradigm's pivot is not an isolated case. Haun Ventures raised $1 billion in May, expanding into AI for the first time; Framework Ventures raised $400 million in June, doubling down on AI and robotics. Three top crypto VCs collectively expanded their scope within two months.

Paradigm says it hasn't abandoned crypto, and that's true. It's still investing in Hyperliquid, stablecoin public chain Tempo, and prediction market Kalshi. But crypto has gone from "the only track" to "one of the frontiers," and capital and attention have been diluted as a fact.

Old money in crypto hasn't left crypto; it's just that crypto is no longer big enough to contain them alone.