Haseeb Qureshi, managing partner at Dragonfly, warned in a July 21 interview that crypto venture capital may approach a structural turning point, with the sector potentially reaching a 'last vintage' as established networks become harder for startups to challenge. Qureshi's warning reflects a market where scale and network effects increasingly favor mature platforms. Cryptorank data supports this consolidation trend, counting only 150 active venture firms participating in crypto funding rounds in July, down from 1,177 in May 2022—an 87% decline and the lowest monthly figure since November 2020.
Cryptorank Reports 150 Active Venture Firms in July
Cryptorank reported that only 150 unique venture firms had participated in crypto funding rounds in July as of July 28. This figure represents the lowest monthly count since November 2020 and marks an 87% decrease from the record of 1,177 active investors in May 2022. The decline suggests that capital is becoming concentrated among fewer funds, with investors becoming more selective when assessing new projects.
Qureshi Compares Crypto Consolidation to Social Media
Qureshi compared crypto with social media, which grew rapidly during the 2010s even though most of its leading platforms had been built years earlier. Facebook, WhatsApp, Instagram and LinkedIn kept expanding, while Bytedance's TikTok became the rare major challenger. Qureshi stated, 'Maybe by the year 2030, pretty much every important company is built.' He acknowledged that the timing remains uncertain but said investors may be overlooking the possibility that a growing crypto market will not always produce a steady pipeline of fundable startups.
Dragonfly Partner Questions Startup Viability on Existing Platforms
Qureshi was skeptical of startups built around a single financial product on platforms such as Hyperliquid. Without control over distribution, he said, those firms risk becoming suppliers rather than durable businesses. 'If Hyperliquid owns the distribution, then you're essentially just like a reseller,' Qureshi stated. 'That's not a very compelling business model.' He indicated that the next phase of crypto VC may favor fewer companies, larger platforms and founders who control their own customers, distribution and economics.
FAQ
What did Haseeb Qureshi warn about crypto venture capital?
Haseeb Qureshi, managing partner at Dragonfly, warned in a July 21 interview that crypto VC may approach a 'last vintage' as established networks become harder for startups to challenge, with the sector potentially facing a structural turning point.
How many active crypto investors did Cryptorank count in July?
Cryptorank counted only 150 unique venture firms participating in crypto funding rounds in July as of July 28, down from 1,177 in May 2022, representing an 87% decline and the lowest monthly figure since November 2020.
Why does Qureshi question startups built on platforms like Hyperliquid?
Qureshi stated that startups without control over distribution risk becoming suppliers rather than durable businesses, saying 'If Hyperliquid owns the distribution, then you're essentially just like a reseller,' which he described as not a very compelling business model.
