The 2026 conversation about "Fish Aim" and financing—VCs are excluding stories and only investing in projects that can survive

A silent but game-changing transformation has occurred in the crypto investment circle in 2025. The era of “telling a good story to raise a large amount of money” has completely ended. Instead, a harsh reality has emerged: VC firms are now using the “fish aim” standard to filter projects—they want to see if the project itself has genuine nutritional value and can sustain itself independently, rather than just a polished narrative.

Ruthless VC Screening: Behind the 4% Approval Rate Is Market Liquidity Extremes

Wintermute Ventures’ performance in 2025 was enough to shock the entire industry. This top-tier market maker and investment firm reviewed 600 projects and approved only 23 deals. A 4% approval rate is not about showing off discerning eyes but declaring a brutal fact: the vast majority of projects that only “tell stories” no longer have survival space.

Even more striking is that fewer than 20% of projects reached the due diligence stage. Founder Evgeny Gaevoy openly admits they have completely abandoned the “throw money and pray” investment model of 2021-2022.

The entire crypto VC ecosystem shrank sharply during the same period. The total number of deals plummeted from over 2,900 in 2024 to about 1,200—a 60% drop. On the surface, global crypto VC investments still saw inflows of $4.975 billion, but the logic of fund allocation has completely changed—they are increasingly flowing into projects that have already demonstrated vitality.

This concentration is reflected in a clear tilt in investment stages: late-stage investments account for as much as 56%, while early-stage seed funding, once carrying the hope of innovation, has been compressed to a historic low. Data from the US market illustrates this further: although deal numbers decreased by 33%, median investment size grew 1.5 times to $5 million. VCs now prefer to concentrate large sums on a few projects they understand rather than casting wide nets indiscriminately.

The root cause of this shift lies in the extreme change in market liquidity structure. The 2025 crypto market exhibits an unprecedented “narrow” feature: institutional funds account for up to 75%, but these vast amounts are trapped in a few major assets like BTC and ETH. OTC trading data shows that while BTC and ETH market share dropped from 54% to 49%, the overall share of blue-chip assets grew by 8%, indicating that capital flowing into small and medium projects is becoming increasingly scarce.

The most deadly phenomenon is the rapid shortening of narrative cycles for competing tokens—from 61 days in 2024 to 19-20 days in 2025. Capital has no patience to wait for small projects’ stories to develop, nor time to help these projects accumulate users. Meanwhile, retail investors have also shifted their focus, turning to AI and tech stocks, leading to a severe depletion of incremental capital in the crypto market.

The once-anticipated “four-year bull cycle” has also completely disintegrated in this wave of change. Wintermute’s report clearly states that the recovery in 2026 will not come as naturally as before. To break this deadlock, the market needs at least one strong catalyst: either ETF expansion to assets like SOL or XRP, or BTC breaking through $100,000 again to trigger FOMO, or a brand-new narrative reigniting retail enthusiasm. In this environment, VC firms can no longer gamble on projects that only “tell stories.” They need projects that can prove their real execution ability and access institutional liquidity from seed rounds.

This is why the investment logic has shifted from “betting on 100 projects for 1 that returns 100x” to “only investing in 4 projects that can survive to go public.” Risk aversion is no longer a synonym for conservative investing but a survival skill.

The Life-and-Death Test of Seed Rounds: Blood-Generating Ability as the “Fish Aim”

Under this extremely precise investment aesthetic, every startup faces the same deadly problem: seed funding is no longer the starting point of burning money but a critical threshold to prove self-sustainability with real data.

Hard Verification of Product-Market Fit

VCs have completely abandoned the approach of being satisfied with beautiful business plans or grand visions. They now demand cold, hard data: at least 1,000 active users or monthly revenue exceeding $100,000. But more crucial is user retention—if the DAU/MAU ratio is below 50%, it indicates users are not buying into the product, and no amount of funding can save it.

Among the 580 projects rejected by Wintermute, many failed at this threshold. They have sleek whitepapers and impressive technical architectures but cannot produce concrete evidence of “real user engagement and willingness to pay.” This is the most direct test of the “fish aim”—projects without genuine users, no matter how well packaged, are essentially hollow shells.

The Second Life-and-Death Line: Capital Efficiency

Wintermute predicts that in 2026, many “profitless zombies” will emerge—companies with ARR (annual recurring revenue) of only $2 million and annual growth rates of just 50% will struggle to attract Series B funding. This means seed teams must achieve a “pre-set survival” state: monthly burn rate cannot exceed 30% of revenue, or they must turn profitable early on.

This sounds harsh, but in a liquidity-starved market, it is the only way out. Practically, teams need to be lean—fewer than 10 members, prioritize open-source tools to cut costs, and even supplement cash flow through side businesses like consulting. Large teams of dozens of people and projects with rapid burn rates will generally be unable to secure the next round of funding in 2026. Capital efficiency is no longer a bonus but a necessary condition for seed survival.

AI Integration Becomes a Standard Requirement

2025 data reveals an astonishing phenomenon: for every dollar invested by VCs, 40 cents flow into crypto projects that are also working on AI—doubling the ratio from 2024. AI is no longer an optional innovation but a standard feature of seed-stage projects.

Seed projects must clearly demonstrate how AI helps shorten development cycles from 6 months to 2 months, how AI-driven agents facilitate capital transactions or optimize DeFi liquidity management. Meanwhile, with the rise of RWA (real-world asset) tokenization, projects also need to use privacy-preserving technologies like zero-knowledge proofs to ensure compliance and reduce trust costs. Projects ignoring AI and privacy tech requirements will be seen as “lagging behind” and gradually phased out.

Liquidity Planning and Ecosystem Compatibility

The most critical requirement is liquidity and ecosystem compatibility. Crypto projects need to plan their pathways from seed stage, clearly explaining how they will connect to institutional liquidity channels like ETFs or DEX aggregators. Data is clear: in 2025, institutional funds account for 75%, stablecoin market cap surged from $206 billion to over $300 billion, and projects driven solely by narratives face exponentially increasing difficulty in fundraising.

Projects should focus on ETF-compatible assets, establish early cooperation with exchanges, and actively build liquidity pools. Teams with the mindset of “raising funds first and listing later” will basically not survive 2026. VC evaluations now focus less on the grandeur of the story and more on how clear the path to listing is.

Comprehensive Assessment and Cross-Disciplinary Team Composition

All these requirements together mean seed rounds are no longer just testing waters but a comprehensive exam. Teams need cross-disciplinary composition—engineers, AI experts, financial specialists, compliance advisors are all indispensable. They must use agile development for rapid iteration, speak with data rather than stories, and pursue sustainable business models rather than relying on fundraising to survive.

Sobering data confirms this: 45% of VC-backed crypto projects have already failed, 77% generate less than $1,000 in monthly revenue, and 85% of tokens launched in 2025 are underwater. These numbers silently but powerfully tell the market that projects lacking blood-generating capability cannot reach the next funding round, let alone successfully list and exit.

The Awakening of Investment Institutions: From Gamblers to Hunters

For strategic investors and VC firms, 2026 marks a clear dividing line: adapt to new rules or be ruthlessly eliminated by the market.

Market Shift from Speculation to Institutional Driving

The core issue is that the entire market’s driving force has undergone a fundamental shift. When 75% of funds are trapped in institutional channels like pension funds and hedge funds, when retail investors turn to AI stocks, and when the rotation cycle of competing tokens shortens from 60 days to 20 days, VCs still engaging in indiscriminate “casting nets” on projects that only tell stories are essentially actively giving away money.

Market data in 2025 bluntly confirms this: GameFi and DePIN narratives fell over 75%, AI-related projects averaged a 50% decline, and in October, a $19 billion leverage cascade liquidated positions. All these signals point to the same conclusion: the market has stopped paying for narratives; it now only pays for real execution and sustainable business models.

Fuel Network’s valuation dropped from $1 billion to $11 million; Berachain plummeted 93% from its peak; Camp Network lost 96% of its market cap—these once-high-profile projects warning the entire industry: “Fish aim” era is over—narratives are dead, execution is king.

Fundamental Change in Investment Standards

Institutions must undergo a thorough strategic shift. First, redefine investment standards: from “how big can this story be” to “can this project prove blood-generating ability from seed stage.” No longer pouring large funds into early stages, but either heavily investing in a few high-quality seed projects or shifting to mid-to-late rounds to reduce risk.

In late 2025, investment in later stages already accounts for 56%, not by chance but as a result of market voting with real actions. Data shows that funds that early shift to mid-late-stage investments have significantly lower failure rates than those still heavily involved in early rounds.

Repositioning of Tracks and AI-Crypto Fusion

More importantly, the investment track itself is being redefined. The integration of AI and crypto is no longer just a trend forecast but a current reality. In 2026, investment in AI-crypto crossover fields is expected to exceed 50%. Those still investing in purely narrative-driven tokens, ignoring compliance, privacy, and AI integration, will find their projects cannot access liquidity, cannot go public, and cannot achieve successful exits.

Emerging sectors also deserve attention: AI Rollups, RWA 2.0, stablecoin applications for cross-border payments, fintech innovations in emerging markets—these areas offer structural opportunities and align better with the investment logic of 2026.

Evolution of Investment Methodology

Finally, the investment methodology itself must undergo a profound evolution. Outbound sourcing will replace passive waiting for business plans; accelerated due diligence will replace lengthy bureaucratic assessments; rapid response will replace slow internal approvals. Actively exploring structural opportunities in emerging markets and establishing differentiated investment advantages are also essential.

VCs need to shift from a “gambling for 100x returns” mindset to a “carefully selected survivors” hunter mentality. Use a 5-10 year long-term perspective rather than short-term speculation, and base decisions on deep understanding of projects’ blood-generating capabilities rather than flashy story packaging.

Era’s Test and Opportunity Window

Wintermute’s report is essentially a wake-up call for the entire industry: 2026 is not a natural continuation of the bull market but a battlefield of winners-take-all. Those who adapt early to precise aesthetics and understand the essence of “fish aim”—whether entrepreneurs or investors—will hold the high ground when liquidity returns.

Participants still clinging to old models, old thinking, and old standards will find their projects failing one after another, tokens going to zero, and exit channels closing one after another. The market has changed; the game rules have changed. The only eternal truth remains: only projects with real blood-generating ability and the capacity to go public deserve capital in this era.

The essence of “fish aim” is exactly this—no pursuit of illusory narrative packaging, but demanding real nutritional value. In 2026, the market will only pay for genuine execution and sustainable business models.