Crypto Venture Capital Effectively Stalled as Talent, Capital Shift to AI

The venture capital market for digital assets has fallen into a slump, with both talent and capital shifting to the artificial intelligence industry.Michael Dempsey, managing partner at Compound, said in a recent Empire podcast interview that the crypto VC market has been effectively stagnant for about two years, Crypto Briefing reported on Nov. 14. Compound is a venture capital firm managing more than $200 million in assets.Dempsey said tech founders were flocking to the crypto industry as recently as 2021, but attention has now shifted to AI. As a result, investment capital as well as talent is moving into the AI sector.He also pointed to the token incentive structures used by crypto projects as a problem. While tokenization itself has meaningful potential, compensation systems built around tokens have struggled to align incentives over the long term.