Active crypto venture firms fell to 150 in July, an 87% drop from the 2022 peak. Dragonfly's Haseeb Qureshi warns startups face a narrowing window as platforms like Hyperliquid own distribution.
Alpha Score of 57 reflects moderate overall profile with weak momentum, weak value, strong quality, moderate sentiment.
Dragonfly managing partner Haseeb Qureshi says crypto venture capital could lose relevance as dominant platforms capture more users and liquidity. The warning comes as the number of active crypto investors falls to its lowest level since late 2020.
“At some point, crypto VC might just be over,” Qureshi said in a July 21 interview. “There might just be a last vintage.”
His point is not that crypto will disappear. It reflects a market where scale, liquidity and network effects increasingly favor a small group of mature platforms. Qureshi compared crypto with social media, which grew rapidly during the 2010s even though most of its leading platforms had been built years earlier. Facebook, WhatsApp, Instagram and LinkedIn kept expanding. Bytedance's TikTok became the rare major challenger.
“Maybe by the year 2030, pretty much every important company is built,” Qureshi said. Large platforms could continue growing while leaving very little room for new players to disrupt them.
Recent funding data points in the same direction. Cryptorank said only 150 unique venture firms had participated in crypto funding rounds in July as of July 28. That was the lowest monthly figure since November 2020 and far below the record of 1,177 active investors in May 2022. Capital is becoming concentrated among fewer funds, and investors are becoming more selective when assessing new projects.
Qureshi was particularly skeptical of startups built around a single financial product on platforms such as Hyperliquid. Without control over distribution, those firms risk becoming suppliers rather than durable businesses.
“If Hyperliquid owns the distribution, then you’re essentially just like a reseller,” he said. “That’s not a very compelling business model.”
Crypto VC is unlikely to vanish overnight. Its next phase may favor fewer companies, larger platforms and founders who control their own customers, distribution and economics. Stablecoins may have begun as a reserve-yield business. Dragonfly's Rob Hadick argues the next phase of value creation will flow to those who own the user relationship.
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