November 7 — Venture capital investors are tightening risk oversight in crypto following October’s market crash, which wiped out roughly $19 billion in liquidations and shook confidence across the sector, according to Arthur Azizov, founder of B2 Ventures.
In an interview with crypto.news, Azizov said institutional investors have become far more selective, shifting capital from speculative token projects toward infrastructure-focused startups capable of surviving future downturns.
“The October flash crash was a wake-up call,” Azizov said. “Funds are tightening exposure, raising internal risk thresholds, and demanding more transparency from venues and counterparties.”
Focus Shifts to Infrastructure and AI Integration
Azizov noted that forward-looking venture capital is moving away from “crypto products” and toward infrastructure — such as tokenized real-world assets, risk analytics tools, and systems that bridge traditional finance with on-chain liquidity.
He added that AI-driven innovation remains strong, with five U.S. startups each raising over $1 billion in Q2, accounting for 35.6% of deal volume and nearly two-thirds of VC value in 2025. “The next wave,” he said, “will be about scaling what already works, often by experimenting and iterating with AI.”
Market Maturity and Consolidation
Azizov said the recent consolidation of venture deals — where fewer, larger funds dominate major rounds — reflects market maturity rather than pure risk aversion.
“Investors now back teams that can deliver institutional-grade products and navigate regulation. Larger funds with domain expertise are better positioned to support founders through volatility,” he explained.
What VCs Look for Now
When choosing projects, Azizov prioritizes founders with proven adaptability, operational discipline, and products that matter even “if the market gets rough.” He said current opportunities lie in risk engines, cross-market connectivity, tokenized assets, and real-time data analytics — areas that create lasting utility regardless of market cycles.
Institutional Blind Spots
Azizov believes institutions often overlook “the market’s plumbing” — particularly perpetual futures, which now account for 68% of Bitcoin derivatives trading and serve as a backbone for liquidity and risk management in digital assets.
Macro Matters More Than Ever
On macro trends, Azizov said crypto and venture funding are now fully exposed to global monetary and trade dynamics. With higher interest rates and tighter liquidity, capital is flowing to projects with clear business models and sustainable economics.
“Volatility isn’t an exception anymore — it’s the norm,” Azizov concluded. “Those who can turn that uncertainty into an edge will build the foundations for what’s next.”
