The cryptocurrency venture capital (VC) sector is undergoing a significant transformation, according to a former VC investor. While some crypto VCs, particularly in Asia and among second and third-tier Western funds, have ceased operations or paused investments, the sector is not expected to vanish. These closures are attributed to the lingering effects of the 2022 Luna collapse, disruptions in the traditional four-year cycle, and extended lock-up periods. The industry is entering a "clearing out" phase reminiscent of the early 2000s internet bubble. This phase is expected to elevate standards for VCs, emphasizing the importance of reputation and capital. Additionally, projects will need to focus on acquiring real users and generating revenue rather than relying on narratives. The shift is also likely to demand higher quality talent to sustain growth and innovation in the crypto space.