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Shed a tear for the venture capitalists. After years of riding high, the Silicon Valley crowd is dragging its tail as an abrupt shift in the macroeconomy—fueled most notably by soaring interest rates—has wiped out their hometown bank, and left them scrounging for funds as investors look elsewhere for high-yield bets. It’s tough out there, but no one is having a tougher time than crypto VCs, as a new Fortune report reveals.

Our own Leo Schwartz teamed up with crack finance reporter Anne Sraders to look at how crypto VCs are faring at a time when token prices continue to slump and the overall economy looks far different from the bull market of two years ago. The pair spoke to venture capitalists in the trenches and discovered that, when it comes to crypto funds, they face a unique set of challenges.

First, crypto VCs have nowhere to hide. In the case of traditional venture capital, firms can carry a bunch of dogs in their portfolio for some time without having to acknowledge valuations have slipped. It’s a different story when their portfolio consists not of thinly traded private shares but tokens that are bought and sold on public blockchains at all hours.

This transparency wasn’t a problem during the go-go times two years ago when firms like Multicoin Capital and Polychain Capital were posting eye-popping returns of 10x or more as tokens went to the moon. Now, though, most token projects are in the toilet, and mark-to-market accounting rules and the frequency of transactions require VCs to deliver bad news to limited partner investors right away.

The job of crypto VCs has become even more thankless since many of those LPs are not familiar with the roller-coaster cycle of crypto, and are reluctant to hold on till the market turns. As Delta Blockchain Fund founder Kavita Gupta told Fortune, “We continuously have to educate the family offices who are, like, a shipping family industry from Vietnam. They’re like, ‘What the hell did you do? You were 6x up!’”

While the crypto VCs interviewed for the report suggested the headwinds they face are very real, they also expressed confidence that market conditions would turn for the better, and they remain committed to the long game. Venture capitalists are always an optimistic bunch—in public at least—so who knows when (or if) their token portfolios will perk up. But for now, let’s give them credit for betting on an emerging industry—and hope their fortunes change.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

DECENTRALIZED NEWS

Tether has fully recovered the $20 billion it lost after the collapse of Terra, reaching an all-time high in market cap. (Bloomberg)

In a major blow to Paxos, the decentralized lending protocol MakerDAO dropped $500 million of the stablecoin from its reserves. (CoinDesk)

Binance delisted a dozen privacy coins, including Zcash and Monero, in France and three other EU countries. (The Block)

Changing Twitter’s logo to the Dogecoin Shiba Inu for a few days in early April is being cited as the latest evidence in an ongoing lawsuit that accuses Elon Musk of manipulating the price of the memecoin. (Fortune)

The death of SB 1751 in Texas has crypto miners breathing a bit easier. (Decrypt)