Dragonfly Capital Closes $650 Million Fund IV Targeting DeFi, Stablecoins and Prediction Markets
San Francisco, Feb. 17, 2026 – Venture‑capital firm Dragonfly Capital announced the successful close of its fourth investment fund at a final capital commitment of $650 million. The new vehicle is earmarked for early‑stage projects in decentralized finance (DeFi), stablecoin infrastructure and on‑chain prediction markets, sectors the firm believes are still at the forefront of the broader crypto expansion.
Fund size and timing
The $650 million raise marks the largest fund Dragonfly has assembled to date. It comes at a moment when cryptocurrency prices have largely stalled and broader market sentiment is modestly bearish. Despite the environment, the firm’s managing partner, Haseeb Qureshi, framed the closing as a “biggest bet yet that the crypto revolution is still early in its exponential growth.”
Investment thesis
Dragonfly’s thesis centers on three pillars:
| Pillar | Rationale |
|---|---|
| DeFi | Continued migration of traditional financial services to programmable, permissionless protocols, with particular interest in lending, derivatives and asset‑management platforms. |
| Stablecoins | Growing demand for reliable on‑chain liquidity, especially as regulatory frameworks mature and institutional users seek low‑volatility bridges between fiat and crypto. |
| Prediction Markets | Emerging demand for decentralized information‑resolution services that can power everything from sports betting to political forecasting, while offering novel token‑incentive models. |
Qureshi highlighted recent portfolio successes as validation. “Our recent bets – from Polymarket and Ethena to Rain and Mesh – have built significant momentum. Agentic payments, on‑chain privacy, and tokenized assets are set to explode, and we want to back the founders driving that change,” he wrote in a post on X.
Track record in downturns
Dragonfly’s willingness to raise capital during market contractions is not new. The firm launched its inaugural fund in 2018, closing at roughly $100 million amid the fallout from the ICO winter. A second fund in 2021 gathered $225 million, and Fund III, announced in 2022, surpassed its $500 million target, ultimately sealing at $650 million just before the prolonged slump that followed the Luna collapse.
Industry observers note that this pattern of counter‑cyclical fundraising reflects a belief that capital scarcity in bear markets can create a “founder-friendly” environment, where well‑positioned venture firms can acquire equity at more favorable valuations.
Market implications
- Investor confidence: The ability to secure $650 million signals continued institutional belief in the long‑term viability of crypto infrastructure, despite short‑term price stagnation.
- Potential for sector consolidation: With a sizable war chest, Dragonfly may become a lead investor in later‑stage rounds, potentially consolidating fragmented DeFi and stablecoin ecosystems.
- Regulatory headroom: As regulators worldwide clarify the treatment of stablecoins and prediction markets, capital infusion could accelerate compliance‑focused product development, positioning portfolio companies ahead of policy curves.
Key takeaways
- Fund size: $650 million, the largest to date for Dragonfly.
- Focus areas: DeFi protocols, stablecoin platforms, prediction‑market applications.
- Strategic timing: Raised during a modest market downturn, echoing the firm’s historic counter‑cyclical fundraising approach.
- Portfolio highlights: Recent investments such as Polymarket, Ethena, Rain and Mesh demonstrate the firm’s confidence in emerging crypto use cases.
- Market signal: Institutional capital remains eager to back the next wave of crypto infrastructure, suggesting that the sector’s “exponential” growth phase is still perceived as nascent.
Dragonfly’s Fund IV is now positioned to back the next generation of crypto innovators, aiming to shape an ecosystem where on‑chain finance, stable value transfer, and decentralized information markets become integral components of the digital economy.
Source: https://thedefiant.io/news/defi/dragonfly-capital-raises-usd650m-for-fund-iv
