Split Capital winds down and returns outside capital; founder exits to join Plasma, citing structural failure of crypto hedge funds despite $100B in venture funding.
VC & Fundraising ·
Split Capital has wound down operations and returned outside capital to investors, with founder Zaheer Ebtikar departing to join stablecoin startup Plasma as chief strategy officer. Ebtikar characterized the crypto hedge fund model as "broken" and unsuitable for the sector long-term, framing the industry's six-year cycle of euphoria—marked by more than $100 billion in venture funding—as a final speculative phase. He noted that despite the fund's profitability, with net returns exceeding 100% and virtually all investors making gains across nearly two years of operation, the broader thesis underlying crypto-focused hedge funds no longer holds.
The wind-down began in fall 2025 when Split Capital returned capital in the eight-figure range to outside backers, according to Fortune. Ebtikar's shift to Plasma reflects a strategic pivot toward stablecoins and blockchain settlement infrastructure, which he views as a distinct opportunity to scale to "trillions of dollars in settlement" demand through integration with traditional finance.
What remains unclear is whether Ebtikar's assessment of the hedge fund model's structural failure represents a broader reckoning across the crypto fund industry or a conclusion specific to his fund's positioning. The long-term viability of stablecoin settlement chains as an alternative to traditional finance infrastructure also remains unproven at scale.