The mood among top venture capitalists at Consensus Hong Kong was not one of retreat, but one of recalibration, as the cryptocurrency market experienced a prolonged slowdown.
Hasseeb Qureshi, managing partner at Dragonfly, described the current venture market as a “bar”: on the one hand, proven verticals combining at scale; on the other, a narrow set of high-risk next-generation bets.
“There are things that are working, and it’s like scaling it up, making it even bigger,” Qureshi said, pointing to “stablecoins, payments and tokenization in particular.” In a market that has cooled from speculative excess, these are the sectors that still demonstrate revenue and product-market fit.
On the other side is the intersection of cryptocurrencies with artificial intelligence (AI). Qureshi said he is dedicating time to AI agents capable of on-chain transactions, although if “you give an AI agent some crypto, they will probably lose it in a couple of days.” The opportunity is real, but so are the attack vectors and design flaws.
The cautious tone reflects the lessons learned. Qureshi said he initially dismissed non-fungible tokens (NFTs) as “definitely a bubble,” only to reverse course months later and support infrastructure games like Blur. That experience, he said, was a reminder that you have to balance conviction with adaptability in fast-moving cycles.
Dragonfly also missed an early opportunity on the Polymarket prediction market.
“We were actually their first term sheet,” Qureshi said of founder Shayne Coplan, but we approved him when a rival fund offered a higher valuation. “Miss generational,” he called it, although Dragonfly later joined a 2024 round before the US election and is now a major shareholder. The conclusion: thematic conviction, in this case around prediction markets, can take years to bear fruit.
Mo Shaikh of Maximum Frequency Ventures argued that the success of companies in crypto still depends on long-term time horizons. His best thesis, he said, was not an exchange but a 15-year bet that blockchain could redesign financial risk systems.
“Have a 15-year timeline,” he advised, urging founders and investors to resist 18-month cycle thinking.
If the risk environment seems tighter, Pantera Capital’s data backs it up. Managing partner Paul Veradittakit said crypto VC capital increased 14% year-over-year, even as the number of deals fell 42%, evidence, he said, of a “flight to quality.” Investors are focusing on “accomplished entrepreneurs” and “tangible use cases.”
After more than a decade of cryptocurrency fundraising – from initial $25 million funds dominated by family offices to the current $6 billion platform – Veradittakit increasingly sees institutions pushing for the next step. But his advice to founders in a weaker market was compelling. “Focus on the product, focus on market fit… If there is a signal, it will come naturally.”
In a down cycle, the risk message is clear: scale what works, experiment selectively, and don’t confuse narrative with fundamentals.
