The collapse of Terra (LUNA) and FTX in 2022 has led to a significant contraction in cryptocurrency venture capital funding, as limited partners (LPs) exercise increased caution. Data from The Block Pro indicates a stark decline in funds raised, with $86 billion secured by 329 funds in 2022, dropping to $11.2 billion in 2023, $7.95 billion in 2024, and just $3.7 billion by 2025 across 28 funds. This trend highlights a tightening of capital allocation by LPs. Despite the downturn, family offices, wealthy individuals, and crypto-native funds continue to participate in the market, albeit at reduced levels since 2022. Smaller funds with less than $50 million in assets and larger entities like Paradigm and a16z may endure, but medium-sized crypto funds face the risk of becoming hollow and potentially disappearing.