The intersection of cryptocurrency and artificial intelligence (AI) has entered a quieter, more selective phase, according to prominent venture capitalists speaking at Consensus Hong Kong 2026. Anand Iyer of Canonical Crypto and Kelvin Koh of Spartan Group described the current climate as a post-hype moment for decentralized AI protocols, with capital and talent shifting toward more focused, utility-driven applications.
"I think we're in the trough right now," said Iyer, whose firm backs early-stage infrastructure. "We went through a frothy period. Now it's about figuring out where the real strength lies." Both investors criticized overinvestment in GPU marketplaces and attempts to build decentralized alternatives to large AI models from companies like OpenAI or Anthropic, noting the capital required is "night and day" compared to what's available in crypto.
Instead, they see potential in purpose-built, full-stack solutions that start with a specific problem and build down to the model, compute, and data layers. Iyer pointed to startups using AI to build custom internal systems in days, skipping expensive SaaS tools. "Speculation won't drive product anymore," he stated. "We have to think about users first." For founders, Koh offered blunt advice: "Twelve months ago, it was enough to have a wrapper on ChatGPT. That's no longer true."
The mood among VCs was characterized as one of recalibration rather than retreat amidst a prolonged market downturn. Hasseeb Qureshi, managing partner at Dragonfly, described today's venture market as a "barbell"—with proven verticals like stablecoins, payments, and tokenization scaling up on one side, and a narrow set of high-risk, next-generation bets on the other.
On the speculative side, Qureshi is spending time on AI agents capable of transacting onchain, acknowledging the real opportunity alongside significant attack vectors and design flaws. The cautious tone reflects lessons learned from past cycles, including initially dismissing NFTs and missing an early opportunity in prediction market Polymarket, which he called a "generational miss."
Maximum Frequency Ventures' Mo Shaikh argued that venture success in crypto hinges on long time horizons, advising a 15-year bet that blockchain could re-architect financial risk systems and urging resistance to 18-month cycle thinking. Data from Pantera Capital supports a tighter environment, with Managing Partner Paul Veradittakit noting crypto VC capital rose 14% year-over-year while deal count fell 42%, evidence of a "flight to quality" toward accomplished entrepreneurs and tangible use cases.
