From 24 to 1 and then to 5: YC is no longer investing in Crypto, but Crypto hasn't disappeared

Author: aiwatch, over six years in the Crypto industry, with recent two years deeply involved in the AI track. Based in Silicon Valley, focusing on GenAI product analysis and cross-disciplinary research between Crypto and AI.

I’ve been in the Crypto industry for six or seven years, and in the past two years, I’ve also been deeply involved in AI, residing in Silicon Valley. Because I’m active in both circles, one clear feeling is: in the mainstream Silicon Valley scene, the word Crypto is mentioned less and less, but the things built with Crypto are increasingly being used.

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

This misalignment is most evident at YC.

YC Winter 2026 just announced, with 149 companies, 5 are related to Crypto. That’s not a high number, but if you look at the historical data, you’ll see a clear story behind these five.

A set of data

Since YC started investing in Crypto projects in 2014, they’ve invested in a total of 177 companies. Here’s the number per batch, showing a very clear trend:

2018-2019: 3-7 companies per batch, steadily increasing.
2020: 5-7 per batch, beginning to accelerate.
2021: jumped to 13-15 per batch.
2022: peaked — Winter batch invested 24, Summer batch 20, totaling 44 Crypto companies in that year.

Then, a cliff.

2023: still 10-13 per batch, holding for a year.
Starting in 2024, collapse — Winter 7, Fall 4, Summer just 1. In the entire summer, YC only invested in one Crypto company.

2025 Winter saw a brief rebound to 10, but then Spring and Summer dropped back to only 2 per batch.

By Winter 2026: 5 companies.

If you’re a Crypto practitioner, seeing “from 1 back to 5” might seem like a sign of recovery. But if you look at what these 5 are actually doing, you’ll find they are almost a different species compared to the 24 companies in 2022.

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

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

None are building chains, protocols, or anything you’d traditionally call “Crypto track.”

This isn’t a recovery — it’s a blood transfusion.

Three certain projects

Let’s quickly review three relatively understandable ones.

Unifold, a New York team, is like Stripe for Crypto deposits. An API+SDK that allows any app to integrate cross-chain, cross-token on-chain deposits in under 10 lines of code. Co-founder Timothy Chung previously worked at Streambird (wallet-as-a-service, later acquired by MoonPay to become MoonPay Wallets), and also spent time at Polymarket and Instabase. Another co-founder, Hau Chu, graduated from Cornell Tech. It’s a typical developer tools business — users don’t need to understand the underlying Crypto.

SpotPay, a San Francisco team, is a new cross-border bank based on stablecoins. CTO Thomas previously worked at Google, was the 4th engineer at Brex. CEO Zsika is also from Google, with a Stanford MBA, grew up in the Caribbean and Latin America, and has firsthand experience of how painful cross-border remittances can be. The product is straightforward: one account handles overseas payments, local payments, global spending (with physical card), and savings. It runs on stablecoins underneath, but the front end looks like a fintech app — no visual cues of Crypto.

Sequence Markets, a five-person team in New York, does intelligent trading execution for digital assets. They help institutional investors route trades across exchanges for better prices and lower slippage. Fully non-custodial, they don’t touch user assets, only provide technology — a classic “selling water” model.

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

Two projects worth more discussion

Orthogonal — AI Agents spend Crypto

I think Crypto practitioners should seriously look at this.

Founder Christian Pickett previously worked at Coinbase in payments, and also at Vercel. Bera Sogut worked at Google on reCAPTCHA and Maps APIs, and at Amazon Robotics. Both are ACM ICPC world finalists.

Their problem: increasingly, AI Agents need to call various paid APIs to complete tasks. But these Agents don’t have credit cards or bank accounts, so they can’t go through the registration-binding-payment process like humans. Currently, developers pre-fund Agents or bind their API keys. When there are only a few Agents, it’s manageable, but when thousands or tens of thousands of Agents need to autonomously call hundreds of paid services, the system breaks down.

Orthogonal built a unified gateway: Agents connect via MCP or SDK, instantly access hundreds of paid APIs, pay per request, no need to manage API keys or establish billing relationships. API providers list once, and all Agents can discover and call them. Settlement is done with Crypto, supporting the x402 protocol — on-chain implementation of HTTP 402 Payment Required.

Why is this relevant to Crypto? Because machine-to-machine real-time micro-payments are exactly what traditional finance struggles with — credit card fees, bank transfer delays. These frictions are tolerable in human transactions but become critical in scenarios where Agents call thousands of APIs daily. Crypto’s programmability, instant settlement, and permissionless nature are a perfect fit.

Timeline note: YC’s Fall 2025 RFS (Request for Startups) emphasized “Infrastructure for Multi-Agent Systems,” and six months later, they invested in Orthogonal. Early supporters include YC alumni like Precip (W24), Riveter (F24), Andi (W22), Fiber AI (S23), indicating this isn’t just theoretical — the demand is real.

An interesting intersection: In a recent viral article, it was said “Agents are the new masters of software,” and SaaS is shifting from B2B/B2C to B2A (to Agents). If that’s true, then payments between Agents become a fundamental infrastructure problem — and Orthogonal bets on Crypto to solve it.

Forum — Turning “attention” into tradable assets

This project is the most imaginative, but also the riskiest.

Founder Owen Botkin previously traded long/short equities at Balyasny, a top hedge fund. Joseph Thomas has worked at NASA and DreamwaveAI. YC’s partner for this project is Jared Friedman, one of YC’s core partners.

Forum aims to create “the first regulated attention marketplace.” Specifically: build indices from data in search engines, social media, streaming platforms, quantifying how much attention a topic, brand, or cultural phenomenon is getting, then allow users to go long or short on attention shifts.

For example: if you think a brand is about to lose public attention due to PR crisis, you can short its attention index. If you believe a cultural trend is heating up, you can go long.

Their core argument: attention is the primary driver of business success in the digital age — advertising, traffic, user growth — all are monetizations of attention. But attention itself has never been directly priced or traded.

This project isn’t labeled as Crypto/Web3 now, but “regulated exchange” plus “creating new asset classes” strongly suggests tokenization. YC’s Spring 2026 RFS first mentioned “new financial primitives,” aligning with this direction.

For the Crypto industry, Forum points to a much broader horizon than stablecoin payments — if tokenized objects are no longer JPEGs or real estate shares, but intangible things like “attention,” it’s a completely different story. Whether it can succeed remains to be seen.

Changes in RFS

Besides what YC invests in, it’s worth noting what YC publicly states it wants to invest in.

YC releases RFS (Request for Startups) each quarter, serving as an official topic guide. Here’s a summary of recent three Crypto-related rounds:

Summer 2025: 14 directions, no mention of Crypto. Even “AI for Personal Finance,” which discusses investment and tax optimization, omits Crypto. YC’s focus is entirely on AI.

Fall 2025: still no dedicated Crypto section, but two directions hint at it — “AI-Native Hedge Funds” (crypto markets 24/7, open data, naturally suited for AI quant), and “Infrastructure for Multi-Agent Systems” (the scene Orthogonal later entered).

Spring 2026: a change. Daivik Goel wrote a dedicated “Stablecoin Financial Services” item, explicitly referencing US stablecoin legislation (GENIUS Act and CLARITY Act), noting that stablecoins are in a regulatory gray zone between DeFi and TradFi. The exact quote: “The regulatory window is open. The rails are being laid.”

Simultaneously, the overall RFS introduced “new financial primitives” alongside AI-native workflows and modern industrial systems.

This is YC’s first explicit focus on Crypto-related directions in recent years. The wording is specific — not just “blockchain” or “Web3,” but “stablecoin financial services,” with concrete areas like yield-bearing accounts, tokenized real-world assets, cross-border payment infrastructure.

My perspective

As someone active in both Crypto and AI tracks, I see this data as good news — but perhaps in a way many don’t expect.

YC hasn’t abandoned Crypto, but it has redefined what kind of Crypto companies are worth investing in.

In short: YC is no longer investing in Crypto per se; it’s investing in companies that use Crypto.

The difference? The former’s value proposition is “building the Crypto ecosystem,” while the latter’s is “solving real problems, with Crypto as the most suitable tool.”

The former’s users need to understand wallets, gas fees, on-chain interactions. The latter’s users often don’t even realize they’re using Crypto — SpotPay users think they’re using a bank app, Unifold clients think they’re integrating a payment SDK, Orthogonal’s Agents don’t even have the concept of “thinking” they’re using Crypto.

What does this mean for us?

First, good news: stablecoin payments have shifted from internal consensus to mainstream Silicon Valley recognition. YC’s dedicated RFS, support for the GENIUS and CLARITY Acts, Stripe’s acquisition of Bridge — all signals that the regulatory path for stablecoins is opening. For teams deeply involved in this track, funding and market perception are improving.

Second, new opportunities: Agent payments are a demand born from the AI industry itself. Crypto practitioners have a natural advantage to seize it. Real-time machine-to-machine micro-payments, programmable money, permissionless settlement — these have been discussed for years, and now they find concrete application in the Agent economy. It’s not us seeking scenarios; scenarios are coming to us.

Of course, there are realities to face: the profiles of competitors are changing. The CTO of SpotPay was the 4th engineer at Brex; the founders of Orthogonal come from Coinbase and Google — not Crypto natives, but with traditional tech company engineering and product experience. Competing with them requires more than understanding chains; we need to improve product experience and engineering.

Also, directions like L1/L2, DeFi protocols, NFTs, DAO tools — not valueless, but in the mainstream accelerators and VC’s priority list, they are no longer top. This doesn’t mean they’re dead, but if you’re working in those areas, your fundraising strategy and narrative may need adjustment.

Finally, the “24→1→5” data line: I believe the most accurate interpretation isn’t “Crypto recovering” or “Crypto declining,” but “Crypto being redefined.”

YC spent two years figuring out one thing — the greatest value of Crypto might not be as an independent industry, but as infrastructure for other industries. Whether this judgment is correct remains to be seen. But as someone active in both tracks, I see huge opportunities for Crypto practitioners — provided we’re willing to look at ourselves from a different angle.

Crypto doesn’t need to disappear, but the best Crypto products might be ones users don’t even realize involve Crypto.

This isn’t compromise — it could be the greatest victory.

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

Data sources: YC Directory (Crypto/Web3 tags, all batches, 177 companies), YC Winter 2026 Launch List (149 companies), YC Request for Startups (Summer 2025 / Fall 2025 / Spring 2026). Details of five Crypto-related projects are from YC’s official site and public info of the companies.