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 deeply involved in the AI sector, residing 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 sector while 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 discussions, 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 dislocation is most evident in YC.

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

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 companies in each batch, and the changes are quite 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 feel 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 neo-banks, trade 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 traditional "Crypto tracks."

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

Three Definitive 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 fewer than 10 lines of code. Co-founder Timothy Chung previously worked on 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 neo-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 focused 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 level—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 Further

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

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

Founder Christian Pickett previously worked on 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-card binding-payment process like humans. The current practice is for developers to pre-charge 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 can access hundreds of paid APIs via MCP or SDK, 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 between machines 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 when 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. Early supporters include a batch of YC alumni companies working on 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: a recent viral article by Orange stated that "Agents are the new masters of software," suggesting that SaaS needs to shift from 2B and 2C to 2A (to Agents). If this judgment holds, then payments between Agents become a foundational infrastructure problem that needs to be solved—Orthogonal is betting on Crypto to address it.

Forum—Turning "Attention" into a Tradable Asset

This project has the most imagination and the highest risk.

Founder Owen Botkin previously worked at Balyasny (one of the world's top hedge funds) trading long and short stocks. Joseph Thomas has been 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 indices 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, the project’s tags do not mention Crypto/Web3, but the combination of "regulated exchange" and "creating a new asset class" will likely involve 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 publicly states it wants to invest in.

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

Summer 2025: 14 directions, not a single mention of Crypto. Even "AI for Personal Finance," which discusses investment and tax optimization, does not mention Crypto at all. 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 suited 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 on "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 it provides 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 sectors, I believe this set of data is actually good news for us Crypto practitioners—though the nature of the good news may differ from what many expect.

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

In a nutshell: YC is no longer investing in Crypto; YC is investing in companies that use Crypto.

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

Users of the former need to understand what wallets, gas fees, and on-chain interactions are. Users of the latter may not even realize 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 don’t even have the concept of "thinking" about it.

What does this mean for us?

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

Secondly, new opportunities: Agent payments are a demand that has emerged from within the AI industry, and Crypto practitioners have a natural advantage in seizing it. Real-time micro-payments between machines, programmable currency, permissionless settlement—these concepts we have discussed for years suddenly have the most concrete application scenarios in the Agent economy. This is not us looking for scenarios; the scenarios are coming to us.

Of course, there are realities that need to be faced: the profile of competitors has changed. SpotPay's CTO is the 4th engineer from 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 merely understanding the chain is not enough; we also need to catch up on product experience and engineering lessons.

Additionally, directions like L1/L2, DeFi protocols, NFTs, and DAO tools—it's not that they lack value, but they are indeed no longer a priority in the eyes of mainstream accelerators and VCs in Silicon Valley. 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 is it "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 in becoming an independent industry, but in becoming the infrastructure for other industries. Whether this judgment is correct still needs time to verify. But as someone involved in both sectors, 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 unaware of Crypto's existence.

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 investments.

---

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.