Olivia Capozzalo & Camila Russo
February 18, 2026

gm, Defiers!

Today’s big story:

Dragonfly closed a $650 million flagship fund this week, despite pundits loudly declaring crypto venture capital dead — but the landscape does look different.

In other news

Hyperliquid backs DC lobby
Staked ETH reaches new highs
Venice AI’s token leads altcoins
Rocket Pool’s Saturn One Upgrade [SPONSORED]

Read more below! But first, please give our sponsors some love; they make this newsletter possible.

Stellar: The Proving Ground for Real-World Privacy

The latest Stellar upgrade, X-Ray, delivers zero-knowledge cryptography that lets developers build privacy into their apps — protecting what matters while keeping Stellar radically open, trusted, and ready for real-world finance.

We’re back! Here’s what you need to know in web3 today

📈 Markets in the Past 24 Hours

TICKER	VALUE	24H
Bitcoin	$67,984	1.24 %
Ethereum	$1,998.33	2.14 %
XRP	$1.48	2.17 %
BNB	$620.12	1.22 %
Solana	$83.64	0.26 %

Today’s Big Story

Crypto Venture Capital May Not Be Over, But the Landscape Looks Different Now

Dragonfly Capital closed a $650 million flagship fund this week, a bold statement in an era when pundits have been loudly declaring crypto VC dead. A Dragonfly investor himself told Fortune this week that the sector was facing a “mass extinction event.”

The data doesn’t tell a clear-cut story either.

According to data from Galaxy Digital from earlier this month, crypto and blockchain startups attracted more than $20 billion in venture capital in 2025 — the largest annual total since the post-mania years of 2022 and more than double the amount raised in 2023. In Q4 alone, VCs deployed $8.5 billion across 425 deals, an 84% quarter-over-quarter increase.

Blockworks’ deal-flow dashboard, which uses RootData, also shows that 2025 was a record year for crypto fundraising at $36 billion, even as deal flow count dropped from the 2022 all-time high to ~990 from ~1,880.

That means money is still flowing, but it’s undeniable that something changed from the high-flying days of 2021 and 2022. And that’s because of where that funding is going.

The 2021 cycle was fueled by expansive web3 bets: gaming tokens, social DAOs, app chains, NFT ecosystems. Valuations ran ahead of usage and attention was often mistaken for adoption.

In 2025, 57% of capital went into later-stage companies, according to Galaxy, suggesting institutional support for scaled ventures with real revenue models. And while pre-seed counts are not back at 2021 levels, the sheer number of deals (more than a thousand) shows founders are still building.

What endured were products tied to financial demand. Stablecoins became essential settlement rails. On-chain trading infrastructure kept growing. Prediction markets such as Polymarket found cultural relevance. Synthetic dollar protocols like Ethena tapped into structural appetite for yield and dollar exposure.

Crypto’s clearest product market fit is finance and venture money followed there.

Dragonfly has been vocal about that thesis. Partner Haseeb Qureshi has argued that crypto’s long-term opportunity lies in rebuilding financial infrastructure rather than chasing consumer hype cycles.

The firm’s portfolio skews toward exchanges, DeFi protocols, stablecoin projects, and market infrastructure. A new fund in this environment is a statement that investors believe those categories still have room to run.

With love,

Cami, founder of The Defiant

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🎬WATCH

Robinhood’s Crypto Head Johann Kerbrat on Why Public Blockchains Will Win

In this episode of The Defiant Podcast, Cami sits down with Robinhood’s head of crypto, Johann Kerbrat, to discuss the strategic move to build on Ethereum. He believes institutions can get the privacy and compliance guarantees they need on public chains like Ethereum, so building on private chains doesn’t make sense as they are just a “fancy database.”

Watch the full interview:

Top News in the Past 24 Hours

Hyper Foundation Backs New DC Lobby with 1M HYPE for Clearer DeFi Rules

Hyperliquid, the largest on-chain perpetual futures exchange by trading volumes, said it is backing a new Washington-based policy organization with 1 million HYPE tokens (around $29 million at current prices), as crypto firms try to influence U.S. rules for decentralized finance.

Why it matters: The new organization represents Hyperliquid’s first major policy move; the platform itself does not officially serve traders in the U.S.

Ethereum Staking Breaks New Highs as Price Slumps

More than 30% of ETH’s circulating supply is now locked in staking contracts, per data from Validator Queue. The percent of supply staked continues to break new highs this month, climbing over 30% for the first time at the end of January.

Why it matters: As the amount of staked ETH climbs, the ETH price has continued to slump after reaching a new ATH near $5,000 in late August.

Erik Voorhees’ Venice AI Leads Altcoin Market

Venice AI, an agentic artificial intelligence protocol created by Erik Voorhees, the founder and CEO of ShapeShift, has led the altcoin market over the past week. Venice AI’s VVV token is up almost 120% over the last week.

Why it matters: The token was launched during the peak of AI token mania last January, but fell alongside the rest of the low-cap altcoin and AI agent market after the LIBRA token scam last February.