Dragonfly Capital has announced the closure of its fourth venture fund at $650 million. The announcement comes at a time when the crypto industry is grappling with plummeting token prices and a shift in investor attention toward artificial intelligence, which the firm describes as a "mass extinction" event for blockchain venture capitalists.

The new fund, dubbed Dragonfly Fund IV, exceeds the firm's initial $500 million target by 30% and matches the size of its third fund raised in 2022. Dragonfly, a prominent player in the crypto venture space, plans to deploy the capital into early-stage and growth-stage projects focusing on decentralized financial infrastructure. Key areas of interest include stablecoins, on-chain finance, and the tokenization of real-world assets (RWAs), which the firm sees as foundational to the next wave of crypto innovation.

Haseeb Qureshi, Managing Partner at Dragonfly, highlighted the challenging market conditions in a statement: "Spirits are low, fear is extreme, and the gloom of a bear market has set in." Despite this, Qureshi expressed excitement about the opportunities ahead, noting that the firm still had significant dry powder from its previous fund to invest during the downturn. He also pointed to growing institutional and governmental adoption, stating that "governments of many of the world's superpowers have started to embrace the benefits of $BTC, blockchains, stablecoins, tokenization, and prediction markets."

This latest raise builds on Dragonfly's track record of successful investments. The firm's third fund propelled it into the upper echelons of crypto VCs, rivaling giants like Andreessen Horowitz and Paradigm. Notable bets include Polymarket, a prediction market platform that gained traction during recent global events; Rain, a Middle East-based crypto exchange; and Ethena, a synthetic dollar protocol. Since its inception, Dragonfly has backed over 100 digital-asset companies, including Cosmos and Monad Labs.