Happy Wednesday,
This is your institutional newsletter, Crypto Long & Short. This week:
Later-stage deals took 57% of crypto venture capital last quarter. Varun Datta of Truth Ventures argues the crowd is paying up for the wrong kind of safety.
Top headlines institutions should pay attention to by Francisco Rodrigues
“Robinhood chain daily DEX volume crosses $1 billion” in Chart of the Week
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– Kim Klemballa
Crypto VCs are mistaking consensus for discipline
By Varun Datta, venture capitalist and CEO of Truth Ventures
Venture capital likes to think of itself as a risk-taking industry. The pitch decks and panel talks all say the same things: we spot visionary founders early, back unproven ideas, sit with uncertainty long enough for it to pay off. At least, that’s how the industry portrays itself.
However, the data tells a different story.
According to Galaxy Research’s Q1 2026 crypto venture capital report, investors allocated about $1.1 billion to just eight new crypto venture funds, the lowest quarterly fund count since the third quarter of 2020. Later-stage companies attracted 57% of all capital deployed during the quarter, while pre-seed deals represented just 19% of completed transactions.
Capital has not disappeared, it has just shifted toward bigger checks for fewer companies, usually those that can already demonstrate product-market fit. What is being presented as discipline increasingly looks like a retreat from the founding stage that venture capital was created to serve.
This creates a problem for the venture capital industry, but it is also an opportunity for investors willing to break from the pack.
When funds wait for traction, a recognized category and somebody else’s term sheet to validate a company, they may reduce uncertainty, but they also pay a higher price and compete with every other investor pursuing the same small group of proven businesses. That is not contrarian investing. It is a consensus trade.
Many of the technologies that defined crypto’s previous cycle did not look inevitable when they first received funding. Layer-2 networks, DeFi protocols and essential developer tools were backed before their markets were established. Investors willing to commit during those quieter periods captured value that disappeared once the opportunity became obvious.
A similar window may be opening now. Founding-stage capital is scarce and sentiment remains cautious while AI has absorbed a growing share of investor attention. OECD analysis found that AI companies attracted 61% of global venture capital investment in 2025. Yet crypto founders are still building the infrastructure required for digital finance to reach mainstream users.
Crypto Long & Short
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Latest Research
Anvil: The Missing Collateral Layer
Anvil: The Missing Collateral Layer
Anvil is a shared on-chain collateral layer built on a programmable letter of credit: reserve assets as a guarantee -no loan, no interest, keep custody & yield.
By CoinDesk Research
Jul 29, 2026
Commissioned byAnvil
Anvil is a shared on-chain collateral layer built on a programmable letter of credit: reserve assets as a guarantee -no loan, no interest, keep custody & yield.
Why it matters:
Anvil is a shared on-chain collateral layer built on a programmable letter of credit: reserve assets as a guarantee -no loan, no interest, keep custody & yield.
View Full Report
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