I just read a fairly interesting analysis by Tom Dunleavy at Varys Capital on how the crypto funding landscape has radically changed over the past few months. And honestly, it makes a lot of sense given what we’re seeing in the market.

Not long ago, VCs had to stay in constant active mode: building networks, creating content, appearing on podcasts, participating in spaces, and justifying their investment strategy. It was almost a full-time job just to remain visible. Now the dynamic is completely reversed. If you have capital available, projects literally chase you. You don’t need to look for anything; the moment people find out you have money on the table, entrepreneurs go straight to your door.

What’s fascinating is seeing how power has been redistributed. According to Varys’s analysis and other market observers, most funds fall into one of these three scenarios: either they’ve already spent everything they had, they’ve moved into more mature rounds (Series A and beyond), or they’re stuck in limbo trying to raise but with not much success. The rounds that used to close in 2-3 weeks now stretch out to 2-3 months. And best of all: projects with weak business models—or ones that simply copy the latest trend in narratives—just don’t get funding. That’s it.

The thing that most caught my attention about the analysis is that there are probably fewer than 20 funds that are truly active in pre-seed and seed rounds right now. That’s a surprisingly low number. But from Varys and other serious VCs’ perspective, this is actually an advantage: they can be selective, do deep due diligence, and don’t need to jump at every opportunity that shows up.

If funds maintain discipline and patience, 2025 and 2026 could be key years for finding genuinely high-quality projects. The market is clearing out the noise, and that usually opens doors for anyone who knows how to wait.