For years, crypto venture capital firms invested almost exclusively in crypto and blockchain startups. Now, some of the industry's biggest firms are starting to look beyond the sector.

Earlier this week, Framework Ventures raised a $400 million fourth fund to invest in what it called "frontier technologies" that include crypto, AI, robotics, energy, fintech, and more. Paradigm is reportedly raising as much as $1.5 billion for a broader frontier-tech fund focused on crypto, AI, and robotics. Haun Ventures raised a $1 billion second fund to invest primarily in crypto and blockchain companies, but also in firms in financial services, the AI agentic economy, and alternative assets. YZi Labs, formerly Binance Labs, has also expanded beyond web3 into AI and biotechnology. Not every major crypto VC is broadening its mandate, however. a16z Crypto and Dragonfly, which have also raised new funds this year, remain focused on crypto.

To better understand what's driving the shift, I asked crypto investors why some of the industry's biggest VCs are broadening their investment focus, why others remain crypto-focused, and what the future of crypto venture capital looks like.

Investors pointed to several reasons behind the shift, including a maturing crypto market, the rapid rise of AI and other technologies, larger funds seeking new opportunities, and the growing overlap between blockchain and adjacent industries.

"Our core mandate has not changed, but the biggest driver of the expanded opportunity set is our founder network," Framework Ventures general partner Rajiv Patel-O'Connor said. "Many people we have backed or worked with in past cycles are moving into adjacent verticals." Patel-O'Connor also said the lines between frontier industries are "dissolving fast" and expects "a wave" of companies building at the intersection of blockchain, AI, robotics, and energy, making the firm's broader investment strategy "a natural extension of our founding strategy, not a departure from it."

Others said the shift also reflects changes within the crypto venture market itself. CoinFund founder, managing partner, and CEO Jake Brukhman said the industry is going through a "maturation period," with fewer crypto verticals proving successful and a smaller pool of high-quality deals. L1D co-founder and managing partner Ray Hindisimilarly said crypto has become "more mature, more serious, and more difficult to compete in," while adding that broader investment mandates are increasingly influenced by capital-raising considerations.

Fund size is also playing a role, according to some investors. Strobe Ventures managing partner Thomas Klocanassaid many funds that were raised during the 2021-2022 cycle are simply too large to deploy into crypto alone. "When you are managing a couple of billion dollars, the current crypto deal count that meets the bar cannot absorb it," he said, adding that crypto, AI, and fintech are increasingly converging at the infrastructure layer.

Hypersphere Ventures founder Jack Platts said each technology cycle has been defined by its own frontier opportunities. While crypto dominated the 2017-2021 cycle, he said AI and a range of other technologies have emerged as compelling investment themes, changing where venture capital is flowing. "There are just so many other interesting places to allocate capital," he said.

When asked whether limited partners, or LPs, are encouraging crypto VCs to expand beyond crypto, investors generally said the shift is being driven by fund managers rather than their allocators. They noted, however, that views differ depending on the type of LP.

Hindi said high-net-worth individuals and family offices are generally more receptive to broader investment mandates, while pension funds continue to back dedicated crypto strategies. "HNWIs and family offices are often more interested in hot trends and are easier to onboard with that shift in mind," he said. "Pension funds are different: very long-term oriented and willing, as we speak, to commit to crypto-only strategies."

For LPs, the bigger concern is making sure managers remain transparent if their investment strategy changes, according to Andy Martinez, founder and CEO of Crypto Insights Group, which works with both allocators and fund managers. "In our conversations with institutional allocators, that transparency is becoming just as important as performance itself," he said.

Can crypto VCs compete with generalist firms?

Asked whether crypto VCs can realistically compete with established generalist venture firms outside crypto, most investors were skeptical. Hindi called the chances "very unlikely," adding that while there may be exceptions, he would be unwilling to invest in such a strategy. (L1D is also a fund of funds.)

Investors who have expanded beyond crypto, however, said they do not need to compete in exactly the same way as traditional venture firms. Framework’s Patel-O'Connor said the firm's advantage comes from moving quickly, leading rounds, and taking a hands-on approach with portfolio companies. "That speed and certainty is something founders value, especially in competitive rounds," he said.

Hypersphere's Platts argued that crypto VCs do not need to become experts across every new technology to compete. Instead, he said investing is about making the right decisions, while the firm's existing founder network and flexibility to pursue opportunities that may be too small or outside the focus of the largest venture firms give it an edge.

Why some VCs are staying crypto-focused

While some major firms are broadening their mandates, others said they have no plans to move beyond crypto.

L1D's Hindi said the firm's strategy remains unchanged because its pension fund LPs continue to value dedicated crypto managers. He also warned that while a handful of firms may successfully expand beyond crypto, "very few will be able to adapt; most will fail." Hindi added that crypto venture capital is entering "a very favourable" investment vintage as competition across the sector eases.

Strobe's Klocanas said the firm has no intention of rebranding around AI despite increasing overlap between the two sectors. Instead, he said Strobe continues to focus on digital assets while investing where AI and crypto genuinely intersect, including agentic payments, AI-driven trading signals, and onchain compute. "We are only now getting to the part where you can build lasting businesses on this technology instead of just tokens," he said.

Where investors see the biggest opportunities

Investors expanding beyond crypto said they continue to see significant opportunities both within digital assets and across adjacent technology sectors.

Outside crypto, Patel-O'Connor said robotics stands out because of its long-term adoption potential and massive addressable market. "I think it can result in truly venture-scale outcomes, and I think from an intelligence perspective, we’re roughly at GPT-2 territory," he said. Within crypto, he remains bullish on stablecoins as they become increasingly embedded into fintech, while identifying onchain capital formation and Hyperliquid's "house of all finance" thesis as some of the sector's most compelling long-term opportunities.

Klocanas pointed to stablecoin infrastructure, cross-border payments, onchain credit, prime brokerage, and structured lending as areas with significant room for growth.

Brukhman highlighted decentralized AI, payments, stablecoins, tokenization, prediction markets, and onchain finance as some of the firm's highest-conviction themes, driven by growing institutional adoption and improving regulation.

Platts said crypto has already found product-market fit across stablecoins, payments, exchanges, and lending, while identifying AI infrastructure, semiconductors, data centers, biotechnology, aerospace, defense technology, robotics, nuclear, and quantum computing among the firm's highest-conviction opportunities outside crypto. He said expanding beyond crypto has also required building new sourcing channels, including paying for access to certain private-company opportunities while expanding the firm's network. He pointed to investments in SpaceX, Neuralink, and Erebor as examples of how Hypersphere has sourced deals beyond crypto.

The future of crypto VC

Investors were divided on how quickly crypto venture firms will broaden their mandates, but most agreed the category itself is likely to evolve.

Klocanas expects the market to split between large multi-strategy firms with crypto practices and a smaller group of specialist investors that remain focused on digital assets. Platts, meanwhile, expects most crypto VCs to eventually broaden their mandates, arguing that crypto is ultimately a subsector of technology rather than a standalone category. He compared today's crypto funds with the telecom-focused funds of previous decades, saying the "crypto VC" label could eventually become outdated, even if dedicated crypto hedge funds continue to exist, because onchain capital markets still require specialized expertise and carry high barriers to entry.

Patel-O'Connor drew a similar comparison to the internet-focused venture firms of the dot-com era, also saying the crypto VC label could eventually disappear.

To subscribe to the free The Funding newsletter, click here.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Learn About Bitcoin

Learn