Analysis: Due to the collapse of LUNA and FTX, LPs are cautious and medium-sized crypto funds may become hollow in the future

PANews reported on August 25 that according to The Block, industry insiders revealed that since the collapse of Terra (LUNA) and FTX in 2022, the financing scale of cryptocurrency venture capital has shrunk sharply as LPs have become more cautious. Cryptocurrency venture capital is now competing with ETFs and DATs for capital inflows.

Data from The Block Pro shows that 329 funds raised over $86 billion in 2022, but this figure plummeted to $11.2 billion in 2023 and $7.95 billion in 2024. By 2025, 28 funds had raised only $3.7 billion. Both the amount raised and the number of funds are showing a sharp decline, reflecting stricter capital screening by limited partners. While family offices, wealthy individuals, and crypto-native funds remain active in cryptocurrency venture capital, these institutions have significantly withdrawn since 2022. Small, well-funded funds with a size of less than $50 million may have a chance to survive, as will larger funds like Paradigm and a16z. However, mid-sized crypto funds may become hollowed out and eventually disappear.