As investment money pours into artificial intelligence, Multicoin Capital is making a different bet. Instead of chasing the AI boom, the $2.7 billion investment firm is sticking to what it knows best: crypto.
Artificial intelligence has become one of the biggest magnets for investment capital. From startups building AI models to companies developing robotics and automation tools, investors are looking for the next big opportunity.
And the excitement is starting to reshape the venture capital industry.
Even firms that built their reputations in cryptocurrency are expanding into AI, hoping to capture a share of the money flowing into the sector.
But Multicoin Capital Management is choosing a different path.
The Austin-based investment firm, which manages $2.7 billion in assets, is resisting the temptation to broaden its investment strategy to include standalone AI businesses. Instead, it believes its experience, relationships, and expertise in digital assets give it an advantage that would be difficult to replicate in another industry.
It’s a decision that raises an interesting question for investors: When a new sector becomes the centre of attention, is it better to follow the money or stick to the area where you have a genuine edge?
1. While Everyone Is Looking at AI, Multicoin Is Staying Focused on Crypto
Multicoin invests in both cryptocurrency and early-stage businesses operating in the digital asset ecosystem.
While several crypto-focused venture capital firms have started exploring opportunities outside their original investment mandates, Multicoin has decided not to follow the same route.
According to Spencer Applebaum, the firm’s general partner and co-head of venture, Multicoin believes its expertise in crypto gives it a competitive advantage.
The firm has spent years building relationships with founders, understanding blockchain technology, and identifying opportunities across the digital asset market.
That experience matters when evaluating early-stage companies, where investors often have limited financial history to work with.
Rather than entering a crowded AI market without an established track record, Multicoin wants to focus on opportunities where its knowledge and network can make a difference.
The thinking is straightforward: being in a fast-growing industry doesn’t automatically make you the right investor for it.
A company can be part of an exciting trend and still struggle to identify the best investments within it. Multicoin appears more interested in maintaining its existing advantage than expanding its mandate simply because AI is attracting more attention.
2. Why Other Crypto Investors Are Moving Into AI
Multicoin’s approach stands out because the investment environment for crypto-focused venture capital firms has become more challenging.
The crypto industry is maturing, and investors are finding fewer opportunities they consider compelling. At the same time, raising fresh capital for crypto investment funds has become more difficult.
AI, meanwhile, is attracting a significant share of venture funding.
According to Crunchbase data cited by Bloomberg, AI-focused companies accounted for roughly two-thirds of the capital invested in US and Canadian startups during the third quarter of 2026.
That is a substantial concentration of investment money in one sector.
For venture capital firms, the appeal is clear. AI is creating opportunities across multiple industries, from software and computing infrastructure to robotics and enterprise automation.
Firms that can identify promising businesses early may benefit as these technologies become more widely adopted.
Some crypto investors are therefore expanding their mandates to include AI and other emerging technologies.
Two notable examples illustrate this shift:
- Paradigm: The crypto-focused venture capital firm raised $1.2 billion in 2026 for a fund that can invest in AI and robotics, in addition to digital assets.
- Framework Ventures and Haun Ventures: Both have expanded their investment focus beyond digital assets.
These firms are responding to a changing investment landscape, where capital is increasingly flowing towards AI.
However, expanding into a new sector also brings a challenge. Investors must develop the knowledge, relationships, and evaluation skills needed to identify worthwhile opportunities in an unfamiliar market.
For Multicoin, that raises a different consideration: Is chasing a larger pool of investment opportunities worth giving up the advantage it has already built in crypto?
3. Crypto Funding Is Recovering, But Fundraising Remains Difficult
The shift towards AI becomes easier to understand when we look at the numbers behind crypto venture capital.
According to Galaxy Research, crypto startups attracted approximately $10 billion in funding during the first half of 2026. That puts investment on a pace similar to the previous year, when the sector received around $20 billion across the full year.
But funding for startups and fundraising by venture capital firms are two different things.
Even when startups continue to attract investment, venture capital firms may struggle to convince investors to commit money to new funds.
That distinction is particularly important in the current environment.
Galaxy Research reported that investors allocated approximately $3.9 billion to five new crypto-focused venture funds during the second quarter of 2026. It was the lowest number of new crypto-focused funds raised in a quarter since the final quarter of 2019.
This creates pressure on investment firms.
They need to convince investors that their strategy can deliver attractive returns, even as competing sectors offer new opportunities and capture more attention.
AI has benefited from this shift in investor interest, while crypto-focused firms have had to work harder to secure fresh commitments.
The challenge for crypto venture capital is no longer just finding promising startups. It is also convincing investors that crypto deserves a place in their portfolios when AI is competing for the same capital.
4. Why Multicoin Is Taking Its Time With Investments
Multicoin’s decision to remain focused on crypto does not mean it is deploying capital as quickly as possible.
In fact, the firm is taking longer to invest the money raised through its latest venture fund, which dates back to 2022.
Applebaum attributed the slower pace partly to changes in startup valuations following the collapse of cryptocurrency exchange FTX in 2022.
As valuations declined, the economics of early-stage investing changed.
Applebaum described a market in which seed-stage companies were raising approximately $3 million at post-money valuations of around $30 million during 2023.
For a fund worth $422 million, investing in these smaller rounds can take considerable time.
Venture capital firms typically need to build a portfolio of investments that offers enough potential upside to justify the risks involved. The size of each investment, the valuations founders are seeking, and the number of attractive opportunities available all influence how quickly a fund can deploy its capital.
Rushing into investments simply to put money to work can create its own problems.
A disciplined investor may prefer to wait for opportunities that meet its criteria rather than commit capital to businesses it does not fully understand.
This is particularly relevant in crypto, where market sentiment, token prices, regulations, and technology can change rapidly.
For Multicoin, taking longer to invest appears to be a matter of finding the right opportunities, not abandoning its original strategy.
5. Multicoin’s Biggest Crypto Position Is HYPE
The firm’s commitment to digital assets also extends to its hedge fund, which invests directly in cryptocurrencies.
According to Applebaum, Multicoin’s largest position is HYPE, the cryptocurrency associated with Hyperliquid, a decentralised derivatives trading platform.
The firm purchased the tokens on the open market, although Applebaum did not disclose the size of the holding.
He also noted that Multicoin generally holds its publicly traded investments for years rather than days or weeks.
This offers a glimpse into how the firm approaches crypto investing.
Instead of treating every market movement as a reason to trade, it appears willing to hold positions over longer periods when it believes an investment has lasting potential.
Hyperliquid operates in the decentralised finance ecosystem, where blockchain-based platforms allow users to access financial services without relying on traditional intermediaries in the same way as conventional exchanges.
Its associated token gives Multicoin exposure to a specific part of the digital asset market.
However, a large position in HYPE does not guarantee future returns. Cryptocurrency investments remain volatile, and the performance of a token can be affected by market sentiment, platform adoption, competition, and broader conditions across the crypto market.
For investors following Multicoin’s strategy, the important point is that the firm continues to concentrate on opportunities within the digital asset ecosystem rather than shifting towards standalone AI companies.
6. Is Staying Focused a Strength or a Risk?
Multicoin’s decision highlights a broader debate in investing.
When a new sector starts attracting enormous amounts of capital, investors face pressure to participate. Sitting out can feel like missing an opportunity, especially when valuations and funding activity are rising.
But there is another side to that decision.
Investing in a popular sector is not the same as investing well.
A venture capital firm that has spent years developing expertise in crypto may have a better understanding of blockchain businesses than of AI startups. Its founder relationships, technical knowledge, and experience evaluating digital assets can help it identify opportunities that less specialised investors might overlook.
Moving into a new industry requires building those advantages again.
On the other hand, maintaining a narrow focus has its own risks.
If crypto investment opportunities remain limited or returns disappoint, a firm that refuses to diversify may have fewer ways to compensate for weaker performance in its core market.
AI’s growth could also create opportunities that overlap with crypto, particularly in areas involving decentralised computing, blockchain infrastructure, and autonomous software systems.
The challenge is distinguishing genuine business opportunities at the intersection of these technologies from companies that combine AI and crypto mainly to attract investor attention.
Applebaum suggested that many investors are trying to force a connection between the two sectors where a clear problem or business need may not exist.
That is an important distinction.
Combining two popular technologies does not automatically produce a valuable product. A business still needs to solve a real problem, attract customers, and develop a sustainable model.
For Multicoin, the priority appears to be finding businesses that make sense within its area of expertise rather than stretching its strategy to fit the latest trend.
7. What This Means for Investors
Multicoin’s approach offers a useful perspective for anyone trying to make sense of today’s investment environment.
AI and crypto may both offer significant opportunities, but they operate differently and come with different risks.
AI investment can involve everything from established technology companies and computing infrastructure providers to early-stage startups developing new models and applications.
Crypto investment spans digital assets, decentralised financial platforms, blockchain infrastructure, and businesses building services around these technologies.
Each area requires a different understanding of how companies generate value and how investors might eventually earn a return.
Here are three lessons worth considering:
- Expertise matters: Investors may be better positioned to evaluate opportunities in industries they understand rather than entering a sector simply because it is attracting capital.
- Capital flows are not the whole story: A surge in funding can signal strong interest, but it does not guarantee that every company receiving investment will succeed.
- Discipline can be an advantage: Waiting for a suitable opportunity may be preferable to investing in a business that does not meet the fund’s criteria.
These lessons apply beyond venture capital.
Individual investors also face pressure to buy into the latest market trend, whether it is AI stocks, cryptocurrency, or another rapidly growing sector.
The key is to understand what an investment actually offers, how it fits into a portfolio, and what risks come with it.
Following a trend without understanding the underlying business can leave investors exposed when sentiment changes.
At the same time, refusing to consider new opportunities simply because they fall outside familiar territory can also mean missing potential growth.
The goal is not to avoid every new trend. It is to distinguish between opportunities that fit an investment strategy and those that are attractive mainly because everyone else is talking about them.
The Bigger Picture: Not Every Investor Needs to Follow the AI Boom
AI is reshaping the venture capital landscape, drawing money away from other sectors and encouraging investment firms to reconsider their strategies.
For crypto-focused firms, this creates a difficult choice. They can expand into AI to access a larger pool of opportunities, or they can remain specialised and trust their existing expertise.
Multicoin Capital has chosen the second option.
With $2.7 billion in assets under management, the firm is continuing to focus on digital assets even as fundraising becomes more challenging and competitors broaden their investment mandates.
That does not mean the strategy will necessarily outperform firms investing across multiple sectors. Its success will depend on the quality of its investments, the development of the crypto market, and its ability to identify businesses with long-term potential.
But its approach makes one thing clear: the smartest investment decision is not always to follow where the most money is going. Sometimes, it is to understand where you have an advantage and stay disciplined enough to use it.
As AI continues to attract investor attention, the real test for Multicoin will be whether its conviction in crypto translates into strong investment performance over time.
Your Take
If you were managing a $2.7 billion investment fund, would you expand into AI while the sector is booming, or stay focused on crypto and the expertise you have already built?
Would you prioritise new opportunities or stick to what you know best?