Crypto VCs Turn to AI, Robotics as Digital-Asset Funding Slows

Venture capital firms focused on digital assets are expanding into emerging technologies such as artificial intelligence and robotics, Bloomberg reported on July 10.

Major crypto-focused venture capital firms including Paradigm, Framework Ventures and Haun Ventures are increasing the share of new funds allocated to areas outside digital assets, including AI, robotics, energy and AI agents, the report said.

Paradigm raised a $1.2 billion fund on July 9 that will also invest in advanced technologies such as AI and robotics. “Crypto remains a very exciting area, but there are now so many opportunities that are hard to ignore,” Paradigm Managing Partner Aria Palmeade said.

Market conditions are shifting as well. Crypto venture capital investment fell about 50% from the previous quarter to $4 billion across 355 deals in the first quarter, according to Galaxy Research. The number of new crypto VC funds dropped to eight, the fewest since the third quarter of 2020.

AI investment, by contrast, is rising. Crunchbase found that AI companies attracted about 70% of global startup funding in the second quarter this year.

The move reflects a natural evolution as crypto becomes more integrated with the fintech industry and the broader financial system, Dragonfly Managing Partner Haseeb Qureshi said. Crypto investing is no longer the domain of specialist VC firms alone. Large platforms and traditional financial investors are now competing in the market.