The next decade in crypto venture capital is set to be dominated by small, specialized funds, according to a report by CoinDesk. As the industry polarizes, large platforms and niche funds are expected to thrive, while mid-sized funds face obsolescence. In Q1 2026, crypto venture capital saw a 38% decline in funding and a 22% drop in transaction volume compared to the previous quarter, with Series C and later-stage funding surging by 1,020% year-over-year. The report highlights that mid-sized funds, typically ranging from $100 million to $500 million, are losing ground due to structural shifts in the market. Institutional investors are increasingly favoring large platforms or opting for direct investments in digital assets, bypassing traditional venture capital routes. Meanwhile, small funds with assets under $50 million are poised to outperform by focusing on specific niches and leveraging their agility in decision-making and investment strategies.