Mike Dudas: The State of Digital Asset Investing in 2026 (What’s Changed)

**Robbie Klages** (0:00)
A friend of the show, Mike, how are you, man? Welcome to the show.

**Mike Dudas** (0:02)
I'm doing great, and thanks for having me.

**Robbie Klages** (0:04)
Beautiful day in the city.

**Mike Dudas** (0:05)
It sure is, in this view. I'm sure every guest tell is ridiculous.

**Robbie Klages** (0:09)
You can see all of your previous places, all of your current places, everything.

**Mike Dudas** (0:15)
Yep, old neighborhood, current office, and yeah, it's beautiful.

**Robbie Klages** (0:20)
How about the Knicks, huh? With the just heartbreaking loss in game, is that game two?

**Mike Dudas** (0:25)
Yeah, a little salty, but we got a game tonight. Yeah, I'm in the city, so I'll find somewhere to watch it with some fans.

**Robbie Klages** (0:32)
Good, man. Well, this is kind of like our annual state of venture side of things. I think we did this last down in SoHo last year was a different state of things, different market, for sure. Yes.
We had Tom Dungley beyond from Verus Capital. He kind of wrote this viral kind of long form piece about just like the state of founders and the state of venture in crypto. And I think you had kind of been talking about this quite a bit last year as well already. And his general framework here was like the amount of VC dollars in the space is dwindling. There's less raises happening. There's less quality teams. It's just a different world. But I kind of thought of this as like, well, if you have capital and you can sniff out the good founders, there's a lot less competition.
There's a lot of kind of newer founders coming in to the space with probably a better pedigree than the previous cohort. And we ended up agreeing that this 2025-2026 vintage was probably going to be one of the more successful ones. Do you agree with that? How do you think about this current lay of the land with this current outlook for these founders?

**Mike Dudas** (1:42)
Yeah, so I'm a Venture Capitalist. I'm deploying in 2026 I'm going to tell you this is going to be the best vintage we've ever had.

**Robbie Klages** (1:49)
LPs, listen up.

**Mike Dudas** (1:50)
So, but a couple of things. So one, there is plenty of capital in the crypto markets, in venture crypto markets. There are a number of mega funds that have been raised. You've seen the announcements. There have been a number of early stage funds, including ours, that have been raised, that folks aren't announcing. But there is a tremendous amount of capital that's resting, and ready to be deployed.
So that's not an issue.
The other point you raised is, hey, we've been talking about, are there great founders? Well, the answer is yes. Are there great ideas? Clearly, there are, because you see a number of breakout protocols. Many of them, most of them, founded many years ago, some of them in other bear markets. But there are ideas, there are founders, and there's capital. So this absolutely is not a time to be sort of depressed about being in crypto based on those things. What's happening is there's just explosions sort of happening. I don't want to laugh about it because they're serious, but there's hacks, there's founders being accused of things, being arrested. There's the Trump family and all of the things associated with them that are looking increasingly sketchy. So there's just a number of really the regulatory environment in DC where we're really eager to pass laws. We thought they'd be passed by now or very close to, and they're not. So there's just a number of crypto macro things happening at the same time that the fundamentals are improving dramatically. So there's not a lack of capital, not a lack of founders, not a lack of ideas, and not a lack of usage, but it feels like every week there's like something that you didn't expect that just comes in and the next hack, the next bad regulatory thing, the next person who gets arrested.

**Robbie Klages** (3:55)
Yeah. And so are you seeing less competition than on the deal side?

**Mike Dudas** (4:00)
So I would say yes.
It's one of those things, right?
The consensus deals are, because of what I just said, are hotter than ever. Prices are getting pushed up. I would say irrational. There's always one buyer. When we look in five years, some of them will have looked rational and they'll be geniuses. So it's a tough market in that I would say founders don't have, there are good founders, but they don't have confidence to take great risk right now. The world outside of crypto and inside of crypto, there's just so much change happening so fast that I do believe and we're seeing it empirically that we're seeing great, we assess talent and we're seeing great talent gravitate towards not great ideas or towards consensus ideas at a rate that we haven't seen in the past. So that's what I would say. And I think that's why you're seeing this lack of deployment. It's because venture capitalists have this like slightly higher view of the market where they can see a lot of things and they're just getting the same pitch over and over and over again. So it's hard to discern who's great and who's not. We're not seeing wild, crazy people. And we're not seeing right now many marginal things that would excite people to take a risk, founders to take a risk. The classic thing would be there's not a marginal retail buyer, for example. There hasn't been, I haven't seen, a breakout consumer app that inspired people. So I think there's just a little bit of a lack of inspiration right now.