Welcome back to Chain Reaction, a podcast that unpacks and dives deep into the latest trends, drama and news in crypto with some of the biggest names in the industry to break things down block by block for the crypto curious.

For this week’s episode, Jacquelyn interviewed Maria Shen, a general partner on the investment team at Electric Capital, an early stage venture firm focused on crypto, blockchain, fintech and marketplaces.

Before Electric Capital, Shen was the CTO and co-founder of Bambify, which helped small to medium-sized businesses create more efficient supply chains with manufacturers globally. Prior to that, she worked at Microsoft.

In March 2022, the firm announced that it closed $1 billion for a pair of crypto funds: a $400 million vehicle for making equity investments in startups, and a $600 million fund intended to invest directly in crypto tokens. Its website currently showcases a portfolio with about 75 investments with crypto startups including Magic Eden, ConsenSys and Bitwise, to name a few.

Earlier this year, Electric Capital put out a report indicating that the number of blockchain developers in the U.S. has declined every year since 2017, dropping to 29% last year from 40% in 2017. We dove into what that report really means and how it will affect the growth of developers domestically and internationally.

“A lot of founders have already moved out of the United States or are looking to move out of the United States,” Shen said. “That also means when we’re looking at investing we are increasingly looking outside the United States for opportunities and interesting founders.”

We also discussed what crypto sectors she’s watching for investments, why she’s betting big on NFTs, and the general venture capital market sentiment amid a shaky crypto market. She thinks the ongoing bear market is “going to last a while and is going to be increasingly difficult for companies to fundraise.”

As for VCs, the macro environment has “shifted so much” and firms “are raising less capital and deploying less capital. A lot of firms are almost at the end of their fund lifetimes.”

Overall, Shen said the crypto fundraising environment will probably become worse going into next year. But on a positive note, she sees the current bear market in a better light compared to the previous one in 2018 when “prices were falling off a cliff.” This market cycle feels “completely different,” she said. “A lot of the things we were really dreaming about and talking about theoretically have been shipped now.”

Today, the crypto ecosystem has Ethereum-focused scaling solutions, more stablecoin options, decentralized finance, onchain governance and NFTs, Shen noted. “These things didn’t exist in 2018, 2019, so it’s interesting to see the market maturing beyond transmitting tokens or money to one another.”

Chain Reaction comes out every other Thursday, so be sure to subscribe to us on Apple Podcasts, Spotify or your favorite pod platform to keep up with the latest in web3 and crypto. To get a roundup of TechCrunch’s biggest and most important crypto stories delivered to your inbox every Thursday at 12 p.m. PT, subscribe here.