<div id="readability-page-1">Has the future of cryptocurrency in finance been firmly established, or is the potential for non-financial applications only beginning to unfold?Chris Dixon, Managing Partner at a16z Crypto, rejected the narrative, stating, <blockquote>“It’s fashionable right now to declare that non-financial use cases of crypto are dead.”</blockquote>He explained that blockchains introduced a coordination primitive, with finance emerging first because infrastructure had to develop before other sectors.Haseeb Qureshi, Managing Partner at Dragonfly, responded directly by challenging the idea that regulation was to blame. He asked why finance thrived despite facing even stricter scrutiny. In his view, consumer crypto failed because of weak demand rather than policy barriers, arguing that the products themselves were poor and ultimately failed the market test.Dixon pointed to internet-era sequencing and supportive policy shifts, while Qureshi cites adoption history, concluding finance remains crypto’s only proven product-market fit.<h2>Capital flows reveal crypto’s true product-market fit</h2>Venture funding rose sharply in 2025, surpassing $20 billion, the highest level since 2022 and more than double 2023 totals. Growth accelerated into Q4, where $8.5 billion flowed across 425 deals, up 84% quarter over quarter.Capital focused on later-stage rounds, infrastructure, and DeFi, signaling institutional conviction rather than retail hype. This expansion aligned with DeFi’s stabilization phase.Total value locked recovered to about $99.07 billion, rebounding from the $50 billion bear-market floor, while stablecoin supply exceeded $307 billion.<div id="attachment_569028"><img src="https://imageproxy.pbkrs.com/https://ambcrypto.com/wp-content/uploads/2026/02/54d048fc-706e-4599-a36f-6a17105af0d8.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="1665" height="492" original-src="https://imageproxy.pbkrs.com/https://ambcrypto.com/wp-content/uploads/2026/02/54d048fc-706e-4599-a36f-6a17105af0d8.png"/>DeFiLlama</div>Lending platforms such as Morpho maintained deep liquidity, reinforcing finance as crypto’s product-market fit layer. Meanwhile, stablecoin settlement reached trillions annually, with adjusted volumes rivaling traditional rails in throughput.<div id="attachment_569026"><img src="https://imageproxy.pbkrs.com/https://ambcrypto.com/wp-content/uploads/2026/02/download-3-scaled.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="2560" height="1493" original-src="https://imageproxy.pbkrs.com/https://ambcrypto.com/wp-content/uploads/2026/02/download-3-scaled.png"/>Source: TokenTerminal</div>Together, funding inflows and payment growth supported finance-led adoption, validating Haseeb’s demand view while still reflecting Dixon’s sequencing logic.<h2>Revenue density is still anchored</h2>Earnings concentration across top protocols reinforces the value-accrual divide.Financial platforms led profitability through the year, with PancakeSwap [CAKE] generating about $15.8 million in 30-day earnings and Aave [AAVE] $10.4 million, signaling fee-driven sustainability.<div id="attachment_569041"><img src="https://imageproxy.pbkrs.com/https://ambcrypto.com/wp-content/uploads/2026/02/download-4-scaled.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="2560" height="1493" original-src="https://imageproxy.pbkrs.com/https://ambcrypto.com/wp-content/uploads/2026/02/download-4-scaled.png"/>Source: TokenTerminal</div>As emissions declined, retained value strengthened through burns and staking, which supported net profitability. In contrast, non-financial sectors relied heavily on token rewards to drive usage. Gaming and social activity spiked during airdrops and play-to-earn phases; however, retention weakened once subsidies faded.Revenue density remained thin, with top blockchain games producing roughly $4.2 million daily and ARPU often below $10–$30. Thus, the utility attracted users but struggled to convert engagement into a durable cash flow.All this together, from a revenue and venture‑returns perspective, Haseeb’s demand argument appears stronger, while Dixon’s view remains structurally long‑term.<hr/><h2>Final Thoughts</h2><ul><li>Finance remains crypto’s dominant value-accrual layer, with capital, revenue, and payment flows consolidating around DeFi and stablecoin rails.</li><li>Utility sectors drive engagement but fail to convert usage into durable cash flow, reinforcing venture skepticism despite long-term expansion potential.</li></ul></div>

The future of cryptocurrency in finance is debated among VCs. Chris Dixon from a16z Crypto argues that non-financial use cases are not dead, while Haseeb Qureshi from Dragonfly attributes consumer crypto failures to weak demand, not regulation. Venture funding surged in 2025, indicating institutional confidence, with finance remaining crypto's proven product-market fit. Financial platforms showed profitability, while non-financial sectors struggled to maintain cash flow. Overall, finance is seen as the dominant value layer in crypto, with ongoing skepticism about utility sectors' long-term viability.

- The discussion centers on the future of cryptocurrency, particularly its financial versus non-financial applications, with experts arguing that finance is currently the only proven product-market fit.  
- Venture funding in 2025 reached over $20 billion, reflecting strong institutional confidence and indicating a significant recovery and growth within the DeFi sector.  
- Despite engagement in non-financial sectors, the inability to generate sustainable cash flow contrasts sharply with the profitability seen in financial platforms, supporting the view that finance will remain crypto's primary value layer.

Is finance crypto’s first chapter or its final form? VCs weigh in…