Why cryptocurrency venture capitalists at Consensus Hong Kong are focusing on long-term strategies

As capital becomes more constrained, investors are favoring “what’s effective,” such as stablecoins and tokenization, while selectively investing in AI and prediction markets.

Paul Veradittakit of Pantera Capital at Consensus Hong Kong 2026 (CoinDesk)

Key points:

• Funding is focusing on stablecoins, payments, and tokenization as the number of deals declines.
• Venture capitalists pointed out past miscalculations (Polymarket) and late adaptations (NFTs) as lessons in balancing confidence with flexibility.
• Investors have noted a “flight to quality,” prioritizing seasoned founders and actual revenue over hype.

The atmosphere among leading venture capitalists at Consensus Hong Kong was not one of withdrawal, but rather recalibration, as the cryptocurrency market faced an extended downturn.

Hasseeb Qureshi, managing partner at Dragonfly, characterized today’s venture landscape as a “barbell:” one side consists of established verticals growing at scale, while the other comprises a limited selection of high-risk, next-generation investments.

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“There are sectors that are effective, and it’s simply a matter of scaling up, expanding further,” Qureshi stated, highlighting “stablecoins, payments, and tokenization in particular.” In a market that has cooled from speculative fervor, these are the areas still showcasing product-market alignment and revenue.

Conversely, there is the intersection of crypto with artificial intelligence (AI). Qureshi mentioned he is exploring AI agents capable of conducting transactions onchain, despite the fact that “if you give an AI agent some crypto, it’s likely to lose it within a couple of days.” While the potential is significant, so are the risks and design vulnerabilities.

This cautious perspective reflects lessons learned. Qureshi noted that he previously regarded non-fungible tokens (NFTs) as “definitely a bubble,” only to change his stance months later and support infrastructure projects like Blur. That experience served as a reminder to balance conviction with adaptability in rapidly changing cycles.

Dragonfly also notably missed an initial opportunity with the prediction market Polymarket.

“We were actually his first term sheet,” Qureshi noted about founder Shayne Coplan, but chose to pass when a competing fund provided a higher valuation. “Generational miss,” he labeled it, although Dragonfly later participated in a 2024 round before the U.S. election and is now a significant stakeholder. The lesson learned: Thematic conviction, especially regarding prediction markets, may require years to yield results.

Mo Shaikh of Maximum Frequency Ventures argued that venture success in crypto continues to depend on long-term perspectives. He asserted that his most promising thesis was not a quick trade but rather a 15-year commitment to the idea that blockchain could restructure financial risk systems.

“Have a 15-year timeline,” he suggested, encouraging founders and investors to avoid short-term, 18-month thinking.

If the venture landscape appears more constrained, data from Pantera Capital corroborates this. Managing partner Paul Veradittakit indicated that crypto VC investment increased by 14% year-over-year, despite a 42% drop in deal count, which he attributed to a “flight to quality.” Investors are gravitating towards “accomplished entrepreneurs” and “concrete use cases.”

After over a decade of fundraising in crypto — ranging from $25 million early funds primarily from family offices to the current $6 billion platform — Veradittakit observes that institutions are increasingly leading the next phase. However, his straightforward advice to founders in a softer market was clear. “Concentrate on product, market fit … If there is a token, it will naturally emerge.”

In a downshifted cycle, the venture message is lucid: amplify what is effective, experiment judiciously, and do not conflate narrative with fundamentals.