Venture Capital Firms Shift Focus in Crypto Investments Amid Market Maturation

According to Cointelegraph, venture capital (VC) firms are becoming increasingly selective in their crypto investments, marking a significant shift from previous cycles. This change is attributed to the maturation of the market, as explained by Eva Oberholzer, the chief investment officer at Ajna Capital. Oberholzer noted that the current stage of the crypto market resembles the evolution seen in other technological sectors over time. She emphasized that the focus has shifted from speculative investments to projects with clear business models and predictable revenue streams. This shift is driven by institutional adoption rather than trends like memecoin frenzies. The evolving VC landscape reflects a broader trend towards institutional investment in crypto, prioritizing revenue-generating digital asset businesses over speculative price movements that characterized previous cycles, such as the 2021 bull market. Traditional financial investors, including Wall Street firms and institutional funds, are increasingly seeking crypto projects that offer established and predictable revenue streams. As a result, VC firms are concentrating on stablecoin projects and other payment infrastructure investments that can generate fees. Additionally, real-world asset tokenization (RWA) platforms are gaining attention due to their revenue models associated with minting and managing tokenized assets on the blockchain. Matt Hougan, the chief investment officer at Bitwise, highlighted the growing interest from Wall Street in Ethereum (ETH) due to its potential for generating earnings through staking. Hougan explained that investing in ETH and staking it can produce earnings, aligning with traditional investors' expectations of revenue-generating companies. The smart contract layer-1 blockchain, which hosts a significant portion of the stablecoin, RWA market, and decentralized finance (DeFi) activities, continues to generate stable revenues through fees and other financial mechanisms. This trend underscores the increasing institutional interest in blockchain technologies that offer tangible financial returns.