I recently came across some quite interesting data. Someone uncovered a batch of financial disclosure documents for crypto funds from the U.S. Securities and Exchange Commission, and it turns out that top-tier institutions like Paradigm and Pantera Capital have significantly shrunk their asset management sizes by 2025. At first glance, it’s a bit shocking, but the underlying logic isn’t that simple.

To be clear: AUM size is not a good indicator of a VC’s quality. This metric can be driven by cryptocurrency price fluctuations—when market sentiment swings, a tweet from an emotionally unstable person can send prices on a rollercoaster. Crypto venture funds experienced asset surges in 2021 and also went through portfolio crashes afterward. Truly successful investors ultimately return the money to LPs, so short-term AUM changes don’t really tell us much.

Looking at it this way, the situation with a16z crypto becomes interesting. Their four crypto funds’ AUM plummeted nearly 40% from 2024, down to $9.5 billion. But this isn’t a loss; they actively distributed the gains from their earlier funds to LPs at the market peak in 2025. As a result, the first fund’s DPI reached 5.4x, which is quite impressive in the VC world. In other words, the shrinking AUM is a sign of “making money and returning it to LPs,” not “holdings crashing.”

Multicoin’s experience is even worse. During the 2021 boom, their AUM approached $9 billion, but by 2025, it was cut in half, down to $2.7 billion. They operate both hedge funds and VC funds, with the structure bearing the brunt. By the way, Multicoin co-founder Kyle Samani left in February this year.

Pantera’s situation isn’t much better either; their AUM also shrank. But similar to a16z, they’ve been actively distributing to LPs. In 2025, five of their portfolio companies went public, including Circle and BitGo, bringing in significant cash backflows.

Interestingly, amid the overall shrinkage, Haun Ventures stands out as the only anomaly. Founded by a former a16z crypto partner, their AUM grew over 30% year-over-year, approaching $2.5 billion. They bet on stablecoins—invested in BVNK, which was acquired by Mastercard for up to $1.8 billion—this deal turned the tide for them. They also raised a new $1 billion fund in 2025.

But these crypto funds aren’t stopping. Paradigm is raising a new fund of up to $1.5 billion, a16z crypto is preparing for $2 billion, and Dragonfly just closed its fourth fund at $650 million. a16z crypto’s fifth fund plans to close fundraising in the first half of 2026, led by Chris Dixon, with a full commitment to blockchain. Paradigm’s new fund will also expand into AI and robotics.

What this reflects is the cyclical fate of crypto venture capital. Traditional VC invests in equity, while crypto VC is directly exposed to token price volatility. Multicoin is an extreme case: from 2017 to 2021, their assets grew by 20,287%, then retraced 90% in 2022—something unimaginable in traditional VC circles.

According to Pantera’s report earlier this year, the total crypto market cap excluding BTC fell about 44% from its late 2024 peak. But history shows that bear markets are also windows for bottom-fishing. These leading institutions are now raising capital intensively, betting on the next cycle. Some go all-in on crypto, others hedge across sectors. Watching this fundraising wave, it feels like the market is preparing for the next rally.