Compound Managing Partner: Cryptocurrency venture capital activities are nearing a standstill, with talent and funds shifting towards AI

According to Crypto Briefing, Compound managing partner Michael Dempsey stated in an Empire podcast interview on October 13, 2026, that crypto venture capital has been sluggish for nearly two years, approaching a standstill, a stagnation that can be traced back to 2024. He believes that developers who once chased the crypto space have now turned to artificial intelligence, and funding has followed suit into AI.

Dempsey compared the current situation to 2021, when tech entrepreneurs flocked to the crypto space. He pointed out that the entire tech industry’s attention is almost entirely focused on AI, leading talent and capital to flow from crypto projects to AI. Additionally, Dempsey mentioned structural issues with token incentives, acknowledging that tokenization has real potential, but achieving long-term alignment of interests with token incentives is challenging.