Crypto VCs Shift Capital Into AI, Robotics and Frontier Tech

Several large crypto venture firms have broadened investment mandates to include AI, robotics and other advanced technologies. Framework Ventures closed a $400 million fourth fund and plans to back companies across crypto, AI, robotics, energy and fintech. Paradigm is reported to be raising up to $1.5 billion for a wider fund targeting crypto, AI and robotics. Haun Ventures closed a $1 billion second fund that will invest mainly in crypto while also allocating to financial services and the emerging AI agentic economy. YZi Labs, formerly Binance Labs, has expanded into AI and biotechnology. Two prominent crypto-focused firms that raised fresh capital this year remain concentrated on blockchain and related startups.

Firm leaders and investors cited several drivers for the shift. Rajiv Patel-O’Connor, a Framework general partner, pointed to the firm’s founder network as the source of adjacent opportunities and said “the lines between frontier industries are dissolving fast.” He described the broader mandate as an extension of the firm’s original strategy rather than a break from it.

Other investors said changes in the crypto deal market are influencing strategy. Jake Brukhman of CoinFund called the industry a “maturation period,” with fewer verticals producing high-quality deals. Ray Hindi, a co-founder of L1D, characterized crypto as more mature and more competitive, adding that fundraising pressures are prompting some managers to widen their scope.

Fund size is another factor. Thomas Klocanas of Strobe Ventures noted that many funds raised in 2021–22 are large enough that deploying capital solely into crypto has become difficult. Jack Platts of Hypersphere said new technology cycles have shifted capital toward areas such as AI and infrastructure, creating more options for investors who previously focused on crypto.

Limited partners differ in their responses. High-net-worth individuals and family offices are generally more receptive to broader mandates, while some pension funds continue to prefer managers dedicated to digital assets. Andy Martinez, founder and CEO of Crypto Insights Group, said allocators expect clear communication when a manager changes strategy and that transparency is becoming as important as performance.

Some firms will remain focused on crypto. L1D plans to keep a dedicated crypto strategy, citing continued demand from certain institutional limited partners. Strobe said it will concentrate on digital assets but invest where AI and crypto meet, naming agentic payments, AI-driven trading signals and onchain compute as examples.

Investors expanding beyond crypto identified specific opportunity areas. Framework highlighted robotics for its long-term adoption potential. Within crypto, stablecoins and onchain capital formation were singled out. Other themes named by backers include decentralized AI, tokenization, payments, prediction markets, AI infrastructure, semiconductors, data centers, biotechnology, aerospace and quantum computing.

Looking ahead, investors expect changes in the structure of crypto venture capital. Some anticipate a split between large multi-strategy firms that keep crypto teams and a smaller set of specialist crypto investors. Others expect many crypto funds to broaden their mandates as blockchain becomes one of several technology subfields.