Crypto venture capital could eventually run out of attractive startup opportunities as the industry matures, according to Dragonfly managing partner Haseeb Qureshi, who said investors should not assume new crypto companies will continue to emerge indefinitely.
Speaking in an interview with Mad Society, Qureshi compared the industry to social media, where dominant platforms continued expanding long after venture-backed innovation slowed.
“VC in social media was basically done by like 2009,” he said. “There were almost no new social media companies that were created after 2009, except for TikTok. ByteDance was pretty much the only one that actually was able to build a real meaningful business after that time. And although the products themselves evolved, the platforms didn’t evolve at all.”
According to him, crypto could see a similar outcome by the end of the decade, with established networks such as Bitcoin, Ethereum and stablecoins continuing to grow while new challengers struggle to overcome the market advantages created by network effects.
“It will almost certainly happen at some point. It happens that way in almost every industry, especially when there are returns to scale and there are network effects as there are in crypto. But I think most crypto VCs don’t think about that,” he explained.
Qureshi added that several startup categories already appear to be losing momentum, including structured financial products launched on Hyperliquid. He argued that projects centered on a single financial product are unlikely to become sustainable businesses if they depend on another platform to reach customers.
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