In a bullish move for the blockchain ecosystem, Amsterdam-based Theta Capital Management has successfully raised over $175 million for its latest fund-of-funds, aimed squarely at early-stage blockchain startups. This capital infusion, announced on May 21, 2025, is set to be funneled into crypto-native venture capital (VC) firms known for their dexterity in fostering blockchain innovation. Theta’s managing partner and chief investment officer, Ruud Smets, highlighted the fund’s focus on specialist managers who possess the nuanced expertise to outshine generalist investors in early funding rounds.
A Strategic Shift Towards Specialization
Smets shared insights with Bloomberg, emphasizing Theta’s long-standing strategy of leveraging specialization and active management as a sustainable edge. “We’ve always been looking for areas where specialization and active management provide a sustainable edge,” he remarked, underscoring how the compounded experience of dedicated crypto VCs has erected barriers against less concentrated investors. Theta’s pivot towards digital assets in 2018, after its founding in 2001, has been marked by strategic backing of prominent crypto investment entities like Polychain Capital and CoinFund. This focus on specialization echoes broader trends in the industry, such as Franklin Templeton’s recent Bitcoin DeFi push, which highlights the growing interest in niche blockchain applications.
As the crypto venture capital landscape begins to regain its footing, Theta’s timely initiative seems to align perfectly with market trends. According to Galaxy Digital, VC investment in digital assets skyrocketed by 54% in the first quarter of 2025, reaching $4.8 billion. This resurgence marks a significant rebound after a prolonged downturn, signaling renewed confidence.
Market Trends and Implications
Despite a 39.5% drop in the number of VC deals in early 2025 compared to the same period last year, total funding soared, hitting $6 billion in Q1—more than doubling from Q1 2024. PitchBook’s senior crypto analyst, Robert Le, noted, “Even amid macroeconomic uncertainty, capital continued to seek crypto’s core utility rails.” The lion’s share of investment, approximately $2.55 billion, was directed towards asset management, trading platforms, and crypto financial services, followed by infrastructure-focused firms which secured nearly $955 million. This trend is further exemplified by the Tokenized Apollo Credit Fund’s DeFi debut, showcasing innovative strategies in the decentralized finance space.
The broader implications of Theta’s fund close cannot be overlooked. With infrastructure and development firms securing substantial funding, the focus appears to be shifting toward bolstering the foundational elements of the blockchain space. Web3 companies, too, are making waves, attracting 23 deals and $231.2 million in funding, further highlighting the diversification within the sector.
Looking Ahead: The Circle IPO and Market Expectations
Amidst this backdrop, the much-anticipated IPO of Circle remains a focal point for market watchers. Speculated to be the most significant crypto equity event since Coinbase’s 2021 debut, a valuation exceeding the rumored $4 billion to $5 billion range could potentially attract a new wave of late-stage capital. As Le pointed out, such a scenario might reset valuation expectations across the payments and infrastructure stack, a development eagerly anticipated by investors.
As of now, with $1.18 billion already secured in VC funding, PitchBook estimates a 64% probability that Circle will go public, a move that could redefine market dynamics.
In the ever-evolving world of blockchain and crypto investments, Theta Capital’s recent fundraise is a testament to the sector’s resilience and potential. While uncertainties linger, the strategic focus on specialization and infrastructure development promises to steer the industry towards a promising horizon. As the landscape continues to shift, the question remains: How will these developments shape the future of blockchain innovation? The coming months will undoubtedly offer more clarity—and perhaps, a few surprises.
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This article is based on: Theta Capital raises $175M to back early-stage blockchain startups
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
