Nobody is pitching Web3 at dinner parties anymore. The term itself has aged out of the vocabulary that founders reach for when they want to sound current, replaced almost entirely by whatever the latest AI agent framework happens to be called that week. And yet, away from the panels and the headline cycle, a narrower and less flashy version of the Web3 thesis is finding real money again — not tokens, not NFTs, but the unglamorous plumbing underneath them.
That is the argument Varun Datta, CEO of the London-based global Web3 venture capital firm Truth Ventures, laid out recently in an op-ed for London Loves Business. Datta’s case is deliberately unfashionable: Web3 was never really about speculation, he argues; it was about infrastructure that took a decade to mature enough for anyone outside crypto Twitter to take seriously. The businesses he backs — Bittensor, StarkNet, peaq, Ternoa, 1inch — do not chase narratives. They solve scaling, coordination, and liquidity problems that decentralised systems have carried since the Ethereum ICO era.
What makes the timing interesting is that Datta is not alone, and he is not describing a niche. Galaxy Research data cited by Waveup puts 2025 crypto and blockchain venture investment above $20 billion across roughly 1,660 deals — more than double 2023’s total, and the strongest year since the 2022 peak. The composition of that money has changed just as much as its size. The bulk of it went to later-stage rounds, the largest late-stage share the sector has recorded, while pre-seed held at roughly a quarter of the deal count. Investors are not funding whitepapers. They are funding companies with usage numbers to defend.
The institutions showed up quietly, then all at once
Datta’s stronger point is not about crypto-native funds at all — it is about who else has started paying attention. He traces a shift among traditional finance players from merely holding digital assets to actually engaging with the infrastructure beneath them. The Economist has written publicly about the efficiencies tokenisation could unlock in settlement systems. BNP Paribas has explored public blockchain rails for money market fund tokenisation. And Intercontinental Exchange, the parent of the New York Stock Exchange, has confirmed talks with Hyperliquid — with ICE’s own CEO reportedly describing the decentralised trading platform as bigger than Nasdaq.
“I genuinely feel there has been a real change in sentiment, interest and imminent investment,” Datta writes, describing the shift among institutions once confined to volatility warnings and regulatory caution.
That framing matters for how this story gets told next. For years, Web3 coverage defaulted to a binary — either the technology was a bubble, or it was inevitable. Datta’s argument, and the capital flows behind it, suggest something less dramatic and more durable: infrastructure businesses building unglamorous, necessary layers — coordination, execution, privacy, liquidity — while speculative attention moved elsewhere. It is the same pattern the early internet went through, when the companies that mattered most in hindsight were rarely the ones consumers interacted with directly. PayPal and Stripe built payment rails. AWS built cloud infrastructure. Nobody was writing hot takes about either at the time.
India’s problem isn’t talent. It’s the tax code
Set this global re-rating against India, and the contrast gets uncomfortable fast. The country has one of the largest developer populations working on blockchain tooling anywhere, and by industry estimates cited by MEXC’s 2026 market guide, more than 150 million Indians hold or have held crypto assets — reportedly the largest user base of any country. None of that has translated into India becoming a serious base for Web3 infrastructure capital, and the policy explains why.
The Union Budget for 2026–27 confirmed, once again, that the 30% flat tax on crypto gains and the 1% TDS on transactions will remain untouched, alongside tighter penalties for reporting failures. Industry bodies like the Bharat Web3 Association have argued the framework pushes trading activity and, increasingly, company registration offshore. The government’s counter-argument is fiscal discipline and consumer protection, and it is not wrong on either count — but the effect on infrastructure founders, who need liquid token markets and predictable compliance far more than retail traders do, has been to make India a place to build from rather than a place to base a company.
There is a second, quieter track running alongside the punitive one. MeitY’s Blockchain India Challenge, launched this year, is actively funding startups building blockchain tooling for governance and public-sector use — tamper-proof land records, supply chain verification, that kind of infrastructure. It is a genuine signal that the state distinguishes between “crypto as speculation” and “blockchain as infrastructure,” which is precisely the distinction Datta’s op-ed is trying to draw for a global VC audience. India has simply drawn that line inside government procurement rather than private capital markets, which limits how much of the current infrastructure investment cycle the country can actually capture.
The Gulf built the opposite trade
MENA, and the UAE specifically, has spent the same three years doing the reverse: trading regulatory ambiguity for regulatory density, on the bet that clarity itself is the product institutional infrastructure capital is shopping for. Dubai’s Virtual Assets Regulatory Authority has spent 2026 tightening rather than loosening its rulebook, fully implementing Travel Rule requirements for licensed virtual asset service providers as of February. Abu Dhabi Global Market, running under the common-law framework familiar to institutional lawyers in London and New York, has become the preferred venue for custody and tokenisation businesses that need a jurisdiction with case law rather than experimental policy.
The volume of activity is no longer boutique. The Dubai Multi Commodities Centre alone has crossed 2,500 registered blockchain and crypto entities, and custody bank BNY has partnered with Finstreet and the ADI Foundation to bring bitcoin and ether custody infrastructure into ADGM — the kind of institutional plumbing that only gets built where the regulator has already answered the questions a compliance officer would ask first. None of this reads as speculative enthusiasm. It reads as a jurisdiction methodically building exactly the infrastructure layer Datta’s thesis says the next cycle of Web3 value will accrue to.
The gap that matters is regulatory, not technological
Strip away the geography and Datta’s underlying question is a useful filter for any infrastructure bet, Web3 or otherwise: does the technology solve a problem that persists regardless of market conditions, and would users keep relying on it if speculative interest disappeared tomorrow? Bittensor’s wager on decentralised compute coordination, StarkNet’s bet on execution speed, peaq’s push into machine-owned digital identity — none of these depend on a bull market to matter. They depend on enough builders choosing to build there.
Where those builders choose to base themselves is now visibly a function of policy, not proximity to talent. India has the engineers. It does not yet have the tax and compliance environment that lets an infrastructure company incorporate, raise, and pay contributors in tokens without a 30% penalty attached to nearly every step. The Gulf has built that environment deliberately and is now absorbing capital and company formation that could just as easily have gone to Bengaluru or Gurugram. If Web3 infrastructure really is entering the phase Datta describes — quieter, more institutional, less dependent on headlines — then the jurisdictions that win this decade will be the ones that decided early which side of the “speculation versus infrastructure” line they wanted to regulate for. India has made that distinction inside government contracts. The Gulf has made it inside its entire regulatory architecture. That difference, more than any single funding round, is what will decide where the next Bittensor gets built.
