Analysis: Due to the collapse of LUNA and FTX, LPs are acting cautiously, and medium-sized encryption funds may become "hollowed out" in the future.

PANews, August 25 - According to The Block, industry insiders revealed that since the collapse of Terra (LUNA) and FTX in 2022, the financing scale for Crypto Assets venture capital has sharply shrunk, as LPs have become more cautious. Crypto Assets venture capital is now competing for inflows with ETFs and DAT. According to Block Pro data, 329 funds raised over $86 billion in 2022, but this number plummeted to $11.2 billion in 2023 and further dropped to $7.95 billion in 2024. By 2025, only 28 funds had raised $3.7 billion. Both the amount of financing and the number of funds are on a sharp decline, reflecting stricter capital selection by LPs. Although family offices, wealthy individuals, and native crypto funds continue to actively support crypto venture capital, these institutions have significantly withdrawn since 2022. In the future, small funds with strong capabilities and a scale below $50 million may have a chance to survive, while large funds like Paradigm and a16z will also endure. However, medium-sized crypto funds may become “hollowed out” and eventually gradually disappear.