Good thoughts here and I agree with you on traditional VC. I think we're just seeing a move away from traditional VC as a whole. Traditional VC was/is so valuable, not only b/c of portfolio access and expertise, but a simplified investment process.
VC firms can provide access to capital in larger sums that would require a lot more fundraising, paperwork, and hassle to do from individual investors. However, this is exactly what the blockchain solves, for the most part. Therefore, the value of a VC firm is highly diminished.
VC firms will have to pivot more towards the advisory and expertise side and be much more comfortable operating more like a hedge fund. In short, I just don't think the traditional way capital is managed and invested is going to apply and it's going to take a whole new breed of investment firms to support crypto.
RE: Blockchain investments and the new problem asset for conventional VCs