Blockchain had more than a decade to get it right. It was called the “most revolutionary innovation since the internet”, given years of open runway, billions in capital, and cultural momentum. The sitting president of the United States launched a cryptocurrency, BTC was adopted as legal tender in El Salvador, celebrities purchased BAYC NFTs, BTC ETFs were even approved. And yet, after multiple super cycles and multiple chances to find lasting utility for the technology, the window of experimentation is closing. Alt season is ending. Blockchain is no longer in startup mode.
Blockchain began in 2009 as a libertarian experiment with Bitcoin but quickly became a magnet for venture investment. By 2017, blockchain had caught VC attention. Ethereum introduced smart contracts, which enabled thousands of startups to raise funds through initial coin offerings. ICOs generated an estimated $4.9 billion that year alone, and much of it with no product. (Sound familiar?) It was the first true capital supercycle for crypto and it ended in collapse.
The 2018 crash decimated retail portfolios and triggered skepticism that lingers to this day. Yet, somehow, the market came back. From 2020 to 2021, blockchain experienced a second revival driven by decentralized finance (DeFi) and non-fungible tokens (NFTs). It felt different. Infrastructure had improved, regulators were paying attention, and traditional finance was getting involved. Funding poured in again and reached a peak of $33 billion in 2021. This cycle, too, came violently undone.
The collapse of TerraUSD in 2022 erased over $40 billion in value nearly overnight. This black swan event became a contagion event that exposed the entire system’s fragility. A cascade of bankruptcies followed. Strong crypto institutions like Celsius, Voyager, Three Arrows Capital, BlockFi, and finally FTX, all fell like dominos. The FTX fraud now ranks among the most notorious frauds in modern finance. It’s easy to blame crypto scams on the degens, but these people weren’t the fringe actors of crypto twitter. They were the mainstream darlings of the industry. They were held up to the world to prove the industry was growing.
By 2023, venture funding in blockchain had dropped over 70% year-over-year, and it hasn’t recovered. In Q2 2025, crypto startups raised just $4.5 billion globally. A 22% decline from the previous quarter. The appetite for blockchain investment has waned. At the same time, AI has taken center stage. In Q1 2025, AI companies raised more than $73 billion, which is nearly 58% of all global venture capital. Nvidia surpassed $4 trillion in market cap. Microsoft and Meta are deploying billions into AI infrastructure. Analysts forecast that AI will be the single largest contributor to S&P 500 gains this year.
This proves that market cycles are going to be determined by credibility from now on. Blockchain had a generous window to prove its real-world utility, yet even now, many projects still operate without clear business models or even a working product. Investors are no longer willing to subsidize founders without a roadmap or measurable outcomes. The threshold for attention has risen, and vague mission statements and tokenomics decks are no longer enough. Furthermore, AI has become the darling of the tech news, and has already proven to have real-world utility. AI is still in infancy, with many issues, but at least companies are bringing products to market.
I still believe in blockchain. There are meaningful applications of blockchain technology. There are still good projects out there, and blockchain has entered the mainstream for the long-haul, but there is a harsh truth revealed here. Being “early” is no longer an excuse. The experimentation phase of blockchain is largely over. The “startup era” is over. The industry is maturing, and those who wish to continue must do the same or be left behind. The days of VC money funding lifestyles instead of products is over. And I, for one, am excited to see what comes of an industry forced to evolve.