From 24 to 1 to 5: YC no longer invests in Crypto, but Crypto has not disappeared

Author: aiwatch, with over six years in the Crypto industry and two years deep into the AI track, based in Silicon Valley, focusing on GenAI product analysis and research in the intersection of Crypto and AI.

I have been in the Crypto industry for six to seven years, and in the past two years, I have also delved into the AI track, residing in Silicon Valley. One obvious feeling from being in both circles is that the term "Crypto" is mentioned less frequently in mainstream Silicon Valley circles, but the activities related to Crypto are increasingly being utilized.

I want to bring back some signals from the AI side for Crypto practitioners to consider.

This misalignment is most evident in YC.

YC Winter 2026 has just been announced, and among the 149 companies, only 5 are related to Crypto. This number is not high, but if you pull historical data, you will find that these 5 companies hide a very clear story behind them.

A Set of Data

YC started investing in Crypto projects in 2014 and has invested in a total of 177 companies to date. I pulled out the number of each batch, and the changes are very intuitive:

In 2018-2019, there were 3-7 companies per batch, steadily climbing. In 2020, there were 5-7 companies per batch, starting to accelerate. In 2021, it jumped to 13-15 companies per batch. In 2022, it peaked—Winter saw 24 companies in one batch, Summer had 20, totaling 44 Crypto companies in one year.

Then came the cliff.

In 2023, there were still 10-13 companies per batch, holding on for a year. In 2024, it began to collapse—Winter had 7, Fall had 4, and Summer dropped to just 1. For an entire summer, YC only invested in 1 Crypto company.

In Winter 2025, there was a brief rebound to 10 companies, but then Spring and Summer fell back to only 2 companies per batch.

By Winter 2026, there were 5 companies.

If you are a Crypto practitioner, seeing "from 1 back to 5" might seem like a warming signal. But if you look at what these 5 companies are actually doing, you will find they are almost two different species compared to the 24 from 2022.

What were the Crypto companies YC invested in 2022 doing? DeFi protocols, NFT infrastructure, DAO tools, L2 scaling, blockchain games, social tokens.

What are these 5 doing in 2026? Stablecoin deposit APIs, cross-border new banks, trading execution engines, AI Agent payment gateways, attention exchanges.

Not a single one is building chains, not a single one is creating protocols, not a single one is doing anything you could name as a traditional "Crypto track."

This is not a warming trend; this is a blood transfusion.

Three Certain Projects

Let’s quickly go through three relatively easy-to-understand projects.

Unifold, a New York team, is building the Stripe for Crypto deposits. A set of APIs + SDK that allows any app to integrate cross-chain, cross-token on-chain deposits with less than 10 lines of code. Co-founder Timothy Chung previously worked at Streambird (wallet as a service, later acquired by MoonPay and became MoonPay Wallets), and has also been at Polymarket and Instabase. The other co-founder, Hau Chu, graduated from Cornell Tech. This is a typical developer tool business—users don’t need to know that the underlying technology is Crypto.

SpotPay, a San Francisco team, is a cross-border new bank based on stablecoins. CTO Thomas was previously at Google and was the 4th engineer at Brex. CEO Zsika also comes from Google, holds an MBA from Stanford, and grew up in the Caribbean and Latin America, experiencing firsthand how painful cross-border remittances can be. The product is straightforward: one account for overseas payments, local payments, global consumption (with a physical card), and interest-bearing savings. The underlying technology runs on stablecoins, but the front end is just a Fintech app, with no visual connection to Crypto.

Sequence Markets, based in New York, is a 5-person team that focuses on smart trading execution for digital assets. It helps institutional investors with smart routing across exchanges to get better prices and lower slippage. It is completely non-custodial, does not touch user assets, and only operates at the technical layer—a typical "selling water" model.

The common point among these three is clear: Crypto is a pipeline, not a selling point.

Two Projects Worth Discussing More

Orthogonal—When AI Agents Spend Money, They Will Use Crypto

This is a project that I think Crypto practitioners should take a serious look at.

Founder Christian Pickett previously worked in payments at Coinbase and has also been at Vercel. Bera Sogut worked on reCAPTCHA and Maps APIs at Google and has also been at Amazon Robotics, and is a two-time ACM ICPC (International Collegiate Programming Contest) world finalist.

The problem they aim to solve is this: as AI Agents proliferate, these Agents need to call various paid APIs to complete tasks. However, Agents do not have credit cards or bank accounts, and cannot go through the registration-binding card-payment process like humans. The current approach is for developers to pre-load Agents or bind their own API keys, which works when there are only a few Agents, but when thousands of Agents need to autonomously call hundreds of paid services, this system cannot hold up.

Orthogonal has created a unified gateway: Agents connect through MCP or SDK to instantly access hundreds of paid APIs, paying per request, without needing to manage API keys or establish billing relationships. API providers can list once and be discovered and called by all Agents. The underlying technology uses Crypto for settlement, supporting the x402 protocol—an on-chain implementation of HTTP 402 Payment Required.

Why is this relevant to the Crypto industry? Because real-time micro-payments from machine to machine are precisely what traditional financial systems struggle with—credit cards have fee thresholds, bank transfers have delays, and these frictions that can be tolerated in human transactions become hard barriers in scenarios where Agents call APIs thousands of times a day. The programmability, instant settlement, and permissionless nature of Crypto naturally fit this scenario.

Notably, the timeline: YC emphasized "Infrastructure for Multi-Agent Systems" in its Fall 2025 RFS (Request for Startups), and six months later invested in Orthogonal. Among the early supporters are a group of YC alumni companies that make Agent products, such as Precip (W24), Riveter (F24), Andi (W22), and Fiber AI (S23), indicating that this demand is not theoretical but genuinely exists.

There is an interesting intersection here: in a recent viral article by Orange, it was stated that "Agents are the new masters of software," and SaaS needs to shift from 2B and 2C to 2A (to Agents). If this judgment holds, then payments between Agents become a fundamental infrastructure problem that must be solved—while Orthogonal is betting on Crypto to address it.

Forum—Turning "Attention" into a Tradable Asset

This project has the greatest imagination and the highest risk.

Founder Owen Botkin previously worked at Balyasny (one of the world's top hedge funds) doing long-short equity trading. Joseph Thomas has worked as an engineer at NASA and DreamwaveAI. The partner assigned to this project by YC is Jared Friedman—one of YC's core partners.

Forum aims to create "the first regulated attention exchange." Specifically, it will build an index from data from search engines, social media, and streaming platforms to quantify the "degree of attention" a topic, brand, or cultural phenomenon receives, allowing users to go long or short on changes in that attention.

For example: if you judge that a brand is about to lose public attention due to a PR crisis, you can short its attention index. If you believe a cultural phenomenon is rapidly gaining traction, you can go long.

Their core argument is that attention is the primary driver of commercial success in the digital age; advertising, traffic, and user growth ultimately boil down to the monetization of attention. However, attention itself has never been directly priced or traded.

Currently, this project does not mention Crypto/Web3 in its tags, but the combination of "regulated exchange" and "creating a new asset class" likely involves tokenization. The term "new financial primitives" first appeared in YC's Spring 2026 RFS, and Forum is right in line with this direction.

For the Crypto industry, the direction represented by Forum is much broader than stablecoin payments—if the objects of tokenization are no longer JPEGs or real estate shares, but rather something like "attention," which has previously been unquantifiable, then this is a completely different story. Of course, whether it can be successfully executed is still too early to say.

Changes in RFS

In addition to looking at what YC has invested in, it is also worth noting what YC has publicly stated it wants to invest in.

YC releases RFS (Request for Startups) every quarter, which serves as an official topic guide. I have summarized the recent three issues related to Crypto:

Summer 2025: 14 directions, not a single mention of Crypto. Even the discussion on "AI for Personal Finance," which involves investment and tax optimization, completely omitted Crypto. YC's attention is fully occupied by AI.

Fall 2025: Still no specific mention of Crypto, but two directions hint at it—"AI-Native Hedge Funds" (the digital asset market operates 24/7, with open data, naturally suitable for AI quant) and "Infrastructure for Multi-Agent Systems" (which is precisely the scenario Orthogonal later entered).

Spring 2026: Changes have arrived. Daivik Goel specifically wrote a line about "Stablecoin Financial Services," directly referencing the GENIUS Act and CLARITY Act, two U.S. stablecoin bills, stating that stablecoins are in a regulatory gray area between DeFi and TradFi. The original wording was: "The regulatory window is open. The rails are being laid."

In the overall introduction of the RFS, the term "new financial primitives" also appeared for the first time, alongside AI-native workflows and modern industrial systems.

This is the first time in nearly two years that YC has opened a specific topic for Crypto-related directions in the RFS. The wording is also very specific—not saying "blockchain" or "Web3," but precisely "stablecoin financial services," and providing specific directions: yield-bearing accounts, tokenized real-world assets, cross-border payment infrastructure.

My Perspective

As someone who is involved in both the Crypto and AI tracks, I believe this set of data is actually good news for us Crypto practitioners—just that the good news may not align with many people's expectations.

YC has not given up on Crypto, but YC has redefined what kind of Crypto companies are worth investing in.

In one sentence, it can be summarized as: YC is no longer investing in Crypto; YC is investing in companies that use Crypto.

What’s the difference? The value proposition of the former is "I am building the Crypto ecosystem," while the value proposition of the latter is "I am solving a real problem, and Crypto happens to be the most suitable tool."

Users of the former need to understand what a wallet, gas fees, and on-chain interactions are. Users of the latter do not even know they are using Crypto—SpotPay users think they are using a banking app, Unifold's clients think they are integrating a payment SDK, and Orthogonal's Agents do not even have the concept of "thinking."

What does this mean for us?

First, the good news: the stablecoin payment track has transitioned from an internal consensus to a mainstream consensus in Silicon Valley. YC has opened a specific topic in the RFS, the GENIUS Act and CLARITY Act are advancing, and Stripe has acquired Bridge—these signals together indicate that the compliance path for stablecoins is being cleared. For teams that have been deeply engaged in this track, the financing environment and market perception are improving.

Secondly, there are new opportunities: Agent payments are a demand that has emerged from within the AI industry, and Crypto practitioners have a natural advantage in capturing it. Real-time micro-payments from machine to machine, programmable currency, permissionless settlement—these are things we have been discussing for years, and suddenly have the most concrete application scenarios in the Agent economy. This is not us searching for scenarios; the scenarios have come knocking on the door.

Of course, there are realities that need to be faced: the profile of competitors has changed. SpotPay's CTO is the 4th engineer at Brex, and Orthogonal's founders come from Coinbase and Google—these individuals are not Crypto natives, but they bring the engineering capabilities and product methodologies of traditional tech companies into the space. We in the Crypto industry need to compete with them, and simply understanding the chain is not enough; we also need to catch up on product experience and engineering practices.

Additionally, directions like L1/L2, DeFi protocols, NFTs, and DAO tools—it's not that they lack value, but in the view of mainstream accelerators and VCs in Silicon Valley, they are indeed no longer a priority. This does not mean these directions are doomed, but if you are working in these areas, your financing strategy and narrative may need to be adjusted.

Finally, regarding the data line "24→1→5," I believe the most accurate interpretation is not "Crypto is recovering," nor "Crypto is declining," but rather: Crypto is being redefined.

YC has spent two years figuring out one thing—Crypto's greatest value may not be to become an independent industry, but to become the infrastructure for other industries. Whether this judgment is correct still needs time to verify. But as someone involved in both tracks, I see a wealth of opportunities for Crypto practitioners—provided we are willing to look at ourselves from a different perspective.

Crypto does not need to disappear, but the best products in Crypto may have users who do not feel the presence of Crypto.

This is not a compromise; it may be the greatest victory.

You may disagree with this judgment, but this is the position expressed by the most influential startup accelerator in Silicon Valley with real investment.

Data source: YC Directory (Crypto/Web3 tag, a total of 177 companies), YC Winter 2026 Launch List (149 companies), YC Request for Startups (Summer 2025 / Fall 2025 / Spring 2026 three issues). Detailed information on the 5 Crypto-related projects comes from YC's official website and public information from each company.