A perfect match between the founder and the market: a bear market is the best test of mettle

Author: Paul Veradittakit

Compiled by: Deep Tide TechFlow

Deep Tide Briefing: While everyone is talking about AI siphoning off $211 billion and crypto supposedly having only $20 billion left, Pantera partner Paul Veradittakit sees, in this bear market, the strongest founder lineup in the past four cycles. These operators who left Goldman Sachs, Citadel, Stripe, and others aren’t here to hype narratives—they’re eyeing the finally “sexy” hard problem: institutional-grade financial infrastructure.

Founder-market fit is the most durable signal in venture capital. Products change, markets change, and regulatory regimes change. But the pairing of specific founders with specific markets is the one constant—and the only thing that compound while prices aren’t rising.

We’ve never seen such a high degree of founder-market fit in the blockchain space. Interesting questions have now narrowed down to two directions—AI and fintech—and the most serious operators are pouring in from Citadel, Stripe, Block, and Goldman Sachs, because that hard problem—institutional-grade financial infrastructure—has finally become the most interesting one.

We care about four traits: deep domain expertise, high initiative, an unfair network advantage, and obsession. Every category-defining project we’ve backed in this bear market—from Offchain Labs to Ondo—has all four.

Founder-market fit is the only thing that compounds when prices don’t rise. Products will change, markets will reprice, and regulatory regimes will evolve. The pairing of specific founders with specific markets is the constant, and the bear market is the best environment to discover this pairing.

If you’re deciding what to do next, the market looks terrible. Bitcoin is down about 50% from last October’s high of $126k. Sentiment is fear; most capital and nearly all attention have shifted to AI—last year, AI attracted about $211 billion, close to half of all venture funding, while blockchain had only about $20 billion. Electric Capital data shows that since the beginning of 2025, blockchain code submissions have dropped by about 75%, and in early 2026, a well-known group of operators in the industry announced they’re turning to AI.

But this picture misses something. Most of the developers who left entered during the last bull market. Builders who stayed for two years or more have just hit historic highs—now writing about 70% of the code. This is exactly what happened in 2022: when the core developer group saw a 70% drawdown, it was still growing. A bear market doesn’t empty the room; it only removes the people who came for the price.

So the question was never whether the market would come back, but who would still be standing when it does. The answer in every cycle comes down to the match between specific founders and specific markets. That is founder-market fit—and the most persistent signal.

What truly compounds

“Fit” comes from Andy Rachleff and Marc Andreessen. But blockchain compresses that concept more thoroughly than any other market. People building this technology—crypto punks and early libertarians—were obsessed with the market even before there was a market. They had nothing else to own. Fit is everything.

Product-market fit asks whether a product has found its audience. Founder-market fit asks an earlier and harder question: why is this specific person better positioned than anyone else in the world to win this specific market?

In a bear market, that difference is everything. Everything else on the founder roadmap is temporary. In blockchain, three years from now the product you deliver won’t be the product you’re building today; the market will reprice, and regulatory regimes will move beneath your feet. When founders have real fit with the market, none of that is fatal. They understand the underlying dynamics deeply enough to keep an advantage through pivots. When they don’t have fit, they blindly shift into a space they don’t understand, and the bear market swallows them.

We made our best bets in a bear market rather than a bull one—backing founders before categories existed, from the earliest Ethereum scaling infrastructure to today’s tokenization infrastructure. In such a self-referential market, fit is the most persistent signal we have.

We’ve never seen this high a level of fit

There’s a part here that should change how you interpret talent flight. In prior cycles, talent scattered across hundreds of speculative narratives, and most people were chasing price. This time is different. The interesting questions have converged into two verticals—AI and fintech—and the founder quality choosing blockchain to solve those problems is the highest I’ve seen across four cycles.

The clearest evidence is who’s showing up. The hard problem in blockchain now is institutional-grade financial infrastructure—which is exactly what the best operators’ career paths in traditional finance have always been solving. Nathan Allman left Goldman Sachs’ digital assets business to found Ondo, and now manages a product suite of about $2.6 billion, bringing Treasuries and other assets on-chain. Ed Felten left his professor role at Princeton and the White House, and co-founded Offchain Labs to build Arbitrum. Even inside our own firm, my partner Franklin Bi comes from JPMorgan’s Onyx blockchain division. Now, founders walking into our meeting rooms come from Goldman Sachs, Citadel, Stripe, and Block. They aren’t here to trade narratives—they’re here because this hard problem has finally become the interesting one.

Market data backs them up. Tokenized real-world assets on public chains have surpassed $30 billion and have grown by more than 400% since the beginning of 2025. In addition, there are about $300 billion of stablecoins. Goldman Sachs, JPMorgan, and Bank of New York Mellon have all launched tokenization products. The GENIUS Act provided a federal framework for U.S. stablecoins last summer. BCG predicts that tokenized assets could reach $1.6 trillion in the 2030s. When a serious version of a problem arrives, serious founders follow. This is scaled founder-market fit—with a concentration we haven’t seen like this in any prior bear market.

The four things we evaluate

When I see a founder in a market like this, I’m looking for four things.

Deep domain expertise. You live in the market, not read its map. In a bear market, buyers only attend the important meetings, and technical depth consistently beats a pitch that sounds good. Before Ed Felten co-founded Offchain Labs and built Arbitrum, he spent a lifetime on the hardest problems in systems and security. We led the seed round. This depth is why the team can clearly see the scaling problem, while most people in the market are still arguing about it.

Highly proactive initiative. The ability to sell a vision by demonstrating—through intensive, skeptical talent—that you truly understand where a specific market is headed. Stani Kulechov did exactly that. Without any financial background, he transformed ETHLend into Aave purely through belief and understanding, and kept building the DeFi-defining money market protocol.

An unfair network advantage. When you have both background and relationships, you can move faster than others—vision matters, but timing matters too. A warm introduction goes further than any cold start, and in the categories being built right now, this advantage compounds. Nathan Allman came out of Goldman Sachs’ digital assets world with both network and belief, knowing it was the right time to launch Ondo. I led our seed round in 2021; today, Ondo controls most of the tokenized stocks market share.

Obsession. When things go bad, people leave. The truly obsessed have been in the game for years—across cycles—starting long before there were returns. Hal Finney, Nick Szabo, and Adam Back spent decades researching digital cash when there was no market and no money, driven only by belief. It’s a trait you don’t see on a resume, but it matters more than anything.

To founders already in the arena

In a bear market, belief is the only remaining fuel

In a bull market, momentum helps founders get the job done. Capital is cheap, hiring is easier, and every release earns attention it doesn’t deserve. A bear market strips all of that away; the only thing pushing founders forward is belief.

Belief isn’t an emotion. It’s an observable output of true founder-market fit. Founders with deep understanding of their market keep building even when tokens fall 50% and every headline turns to AI, because they can see the end point the market hasn’t priced yet. People without belief look at the same charts, lose courage, and then leave. That’s why a bear market is the best time to evaluate founders. Prices do the filtering for us, leaving exactly the signal we’re trying to buy.

If you’re one of the operators inside Goldman Sachs, Citadel, or Stripe who’s wondering whether now is the time, here’s my message: yes. A bear market isn’t risk—it’s a proving ground, the cleanest environment to build compounding fit. Blockchain doesn’t need more tourists. It needs more founders with real fit to drive progress in financial infrastructure, and there has never been a better start time than this window when everyone is leaving.

To founders already in the arena: stay focused and keep building. Founder-market fit is the thing that compounds even when prices don’t rise, and prices will test that belief. Fit is what allows it to endure.

Our commitment hasn’t changed. We launched the first U.S. Bitcoin fund back in 2013, when the price was $65. Since then, in every bear market we’ve made category-defining bets, including the Arbitrum seed round in the last bear market. We will keep doing the same in this bear market. If you’re building at the intersection of the market and belief, that’s where we want to get in early.