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Dragonfly has closed a $650 million fourth fund, giving the crypto venture firm fresh capital to deploy even as the broader blockchain investment market remains stuck in a difficult fundraising environment. Fortune first reported the raise on Feb. 17, with additional reporting from CoinDesk and other outlets confirming the new vehicle and its focus on early-stage crypto companies.
We just closed Dragonfly Fund IV at $650M.
— Haseeb ＞|＜ (@hosseeb) February 17, 2026
It's a big milestone, and yet, it’s a weird time to celebrate. Spirits are low, fear is extreme, and the gloom of a bear market has set in.
But here's the thing: we raised almost every single Dragonfly fund into bear markets.
Fund I…
The fund is notable not only for its size, but for its timing. Dragonfly is raising capital during another industry downturn, with its leadership arguing that some of the firm’s strongest vintages were also built in moments of fear and dislocation. Managing Partner Haseeb Qureshi described the current backdrop as one where “spirits are low” and bear market gloom has returned, while General Partner Rob Hadick went further, calling the current crypto venture environment a “mass extinction event.”
That framing helps explain why this fund matters beyond Dragonfly itself. In a market where many crypto-native investors are struggling to raise fresh capital, a $650 million close signals that at least some limited partners still want exposure to blockchain infrastructure—especially when it is tied to financial use cases instead of the broader Web3 narratives that dominated the last cycle.
Fortune reported that Dragonfly plans to use the new fund to back early-stage companies, with stablecoins, decentralized finance, on-chain payments, prediction markets, and tokenized real-world financial products among the areas drawing the firm’s attention.
That investment focus reflects a larger shift already underway across crypto. Rather than betting on consumer apps or social token experiments, Dragonfly’s partners have increasingly argued that crypto’s strongest long-term use cases are financial. Qureshi told Fortune that “non-financial crypto has failed,” while Tom Schmidt described the move toward on-chain financial infrastructure as the biggest meta shift he has felt in his time in the industry. Portfolio companies including Polymarket, Ethena, Rain, and Mesh were cited as examples of that thesis taking shape in real time.
The raise also extends Dragonfly’s rise into the top tier of crypto venture firms. The firm previously raised $100 million for its first fund in 2018, roughly $225 million for its second fund in 2021, and $650 million for its third fund in 2022. That earlier fund helped back companies that became major names during the current cycle, including Polymarket and Ethena, and strengthened Dragonfly’s standing alongside larger crypto investors such as Paradigm and Andreessen Horowitz.
Still, the announcement does not come without complications. Dragonfly has remained under scrutiny since prosecutors said in July 2025 that they were considering potential criminal charges against certain employees tied to the firm’s 2020 investment in Tornado Cash. CoinDesk reported at the time that Tom Schmidt was among those named in court discussions around the matter. Dragonfly has continued operating and expanding despite that overhang.
Even so, the new fund suggests Dragonfly believes the next phase of crypto will be built less around speculative consumer narratives and more around infrastructure that looks increasingly like modern finance on-chain. If that thesis proves right, this raise may be remembered less as a contrarian bet during a downturn and more as a marker of where crypto venture capital thinks the industry is headed next.
