TechFlow news — Ari Paul, founder and chief investment officer of crypto investment firm Block Tower Capital, tweeted that approximately 98% of existing venture capital firms—including those calling themselves angels—are expected to cease operations within the next five years.
The assets held by these firms, including both traditional finance (tradfi) and cryptocurrency holdings, have already declined by more than 80–95% from their peak levels. They are now surviving only through support from small follow-on or bridge funds. Surprisingly, many venture capitalists themselves are unaware of this reality. Even among firms with relatively strong performance records, a significant number have failed to achieve exits.
When corporate debt offers superior risk-adjusted returns and diversification benefits, anyone would borrow at the rates offered by platforms such as Blockfi, Celsius, 3AC, and Genesis.
It should be noted that factors like interest rates are cyclical, but these cycles tend to be quite long. We have just concluded an approximately 40-year period of declining interest rates and expanding venture capital "supply."
