Dragonfly Capital closes $650M Fund IV amid VC slump

Dragonfly’s $650M Fund IV signals institutional confidence despite downturn

Cryptocurrency venture firm Dragonfly has closed its fourth fund at $650 million, exceeding an initial $500 million target, as reported by The Block (https://www.theblock.co/post/390188/dragonfly-closes-650-million-for-fourth-crypto-venture-fund-amid-bear-market-gloom/). The report frames the close as coming during a prolonged market downturn, with the firm emphasizing lessons from prior bear-market vintages.

The new vehicle adds fresh dry powder just as many managers face slower commitments and smaller closes. That combination typically favors disciplined pricing, longer diligence cycles, and a tilt toward durable infrastructure rather than momentum sectors.

Thesis shifts toward stablecoins, RWAs, and financial infrastructure

Dragonfly’s deployment priorities are shifting toward stablecoins, real‑world assets (RWAs), payment rails, and core financial infrastructure, according to CoinDesk (https://www.coindesk.com/business/2026/02/17/crypto-venture-capital-firm-dragonfly-raises-usd650-million-despite-gloom-of-a-bear-market). The focus aligns with dollar‑denominated use cases and institutional plumbing rather than consumer‑centric speculation.

This reframing reflects how value is consolidating around fiat‑linked instruments, compliant issuance, and cross‑border settlement capabilities. Tom Schmidt, Partner at Dragonfly, said, “This is the biggest meta shift I can feel in my entire time in the industry … investors are realizing there will be fewer native tokens … and more tokens that represent a real world asset like stocks and private credit funds.”

Recent portfolio momentum in Polymarket, Ethena, and Rain has been cited as reinforcing this thesis, as covered by Fortune (https://fortune.com/2026/02/17/dragonfly-fourth-fund-crypto-venture-capital-blockchain-polymarket-ethena/). These outcomes illustrate traction in markets and products tied to real economic flows.

For founders, a $650 million pool suggests room for seed to growth checks in compliance‑first infrastructure, stablecoin issuance tooling, and B2B settlement software. Closing a fund does not imply immediate deployment; pacing will likely remain selective.

Limited partners gain counter‑cyclical exposure to financial middleware that could benefit if regulatory clarity improves and on‑chain settlement volumes rise. Governance, KYC/AML readiness, and licensing posture may weigh more heavily in underwriting.

Editorially, the timing underlines a contrarian stance on vintages raised in stressed markets. Haseeb Qureshi, Managing Partner at Dragonfly, said the raise arrived when “spirits are low, fear is extreme, and the gloom of a bear market has set in.”

At the time of this writing, Coinbase Global (COIN) traded around $164.81 after hours, up 0.30%, based on Nasdaq data. This provides neutral context for public‑market appetite around crypto‑exposed equities.

Peer comparison and deployment signals to watch

Positioning versus a16z and Paradigm on size, timing, focus

At $650 million, Fund IV places Dragonfly in the same capital tier as leading crypto vehicles, with vintage timing skewed to a bear market. The emphasis appears more weighted to infrastructure, stablecoins, and RWAs than to consumer‑oriented Web3.

Relative to a16z and Paradigm’s larger multi‑strategy arsenals, this size suggests concentration in core financial rails and institutional products. The timing could prove advantageous if entry prices stay disciplined.

Deployment cues: stablecoins, payment rails, RWAs, regulatory clarity

Near‑term signals include licensed stablecoin issuers, bank partnerships, and payment corridor pilots that validate on‑chain settlement. Watch custody integrations, fiat on/off‑ramps, and RWA securitization mechanics aligned with compliance.

Clarity around cross‑border transfers, custody, and disclosures may accelerate check sizes. Evidence of enterprise adoption and predictable fee economics would indicate conviction to scale positions.

FAQ about Dragonfly Fund IV

Which sectors will Dragonfly prioritize with Fund IV (e.g., stablecoins, RWAs, infrastructure, payment rails)?

Stablecoins, RWAs, institutional payment rails, and core financial infrastructure with compliance‑forward designs and enterprise distribution.

How does Fund IV compare to Dragonfly’s prior funds and peers like a16z and Paradigm in size, timing, and strategy?

At $650 million, it sits among top crypto funds, closed in a downturn, and emphasizes infrastructure and fiat‑linked assets over consumer apps.