Crypto hedge fund Split Capital is winding down after delivering more than 100% net returns since its launch in January 2024, according to founder Zaheer Ebtikar, who is now joining stablecoin-focused blockchain startup Plasma as chief strategy officer. The move is notable because the fund is not shutting down due to poor performance. Instead, Ebtikar framed the decision as a response to a deeper structural shift across the digital asset industry.
In comments shared publicly and first highlighted by Fortune, Ebtikar said Split Capital generated roughly 100% returns in 2024 and about 20% in 2025, leaving the fund with cumulative net returns above 100% from inception. He said nearly all investors made money. That performance makes the closure stand out at a time when many funds disappear because of weak results, capital flight, or operational stress. In this case, the founder appears to be stepping away from a profitable strategy because he believes the market itself has changed.
A Profitable Fund, but a Changing Market
Split Capital was launched during one of crypto’s weaker periods, with an investment thesis centered on the idea that venture capital would eventually rotate into undervalued liquid tokens. The firm attracted limited partners including Novi Loren and UTXO Management, built an eight-figure asset base, and also operated a research arm under the name Split Research. The strategy was designed for a market where information asymmetry, liquidity dislocations, and narrative shifts could create outsized opportunities for active managers.
But Ebtikar now argues that the environment no longer rewards that model in the same way. In his view, crypto has matured enough that the old hedge fund playbook has lost much of its edge. He suggested that the industry is no longer rewarding traders who simply chase momentum. Instead, the key question has become where durable value will be created next. That shift, he said, is forcing a rethink of what kinds of businesses make sense in the sector.
Part of his reasoning centers on how capital has entered crypto over the past several years. Ebtikar pointed to the fact that more than $100 billion in venture funding has flowed into the sector over roughly six years, yet the market has still returned to what he described as a humbling baseline. He also cited the launch of spot bitcoin and ether exchange-traded funds by large traditional finance firms such as Blackrock and Fidelity. Those products have made it easier for institutional investors to gain crypto exposure directly, reducing the need to access the asset class through specialized fund managers.
Institutional Access Is Reshaping the Hedge Fund Case
The broader implication of that trend is significant. For years, crypto-native funds could justify their role by offering market access, specialist knowledge, and trading expertise in an inefficient and fragmented ecosystem. As regulated products expand and institutional gateways improve, some of those advantages naturally erode. Ebtikar appears to believe that this process is far enough along that the traditional crypto hedge fund structure is becoming less compelling, at least relative to other opportunities in the market.
He also pointed to a wider retreat or repositioning among top venture firms. According to the report, Paradigm has expanded into artificial intelligence and robotics, Multicoin partner Kyle Samani has shifted investment focus, and Dragonfly’s Rob Hadick described the current backdrop as a “mass extinction event” for crypto venture capital. Taken together, those observations suggest that Ebtikar sees his decision not as an isolated career move, but as part of a larger reordering of incentives within the industry.
Split Capital reportedly returned outside capital to investors by the end of 2025 and began winding down as a full fund entity. It continues to operate in a limited capacity using proprietary capital only. The staged approach matters because it indicates an orderly transition rather than a forced shutdown. There was no mention of regulatory trouble, investor disputes, or emergency redemptions. Instead, the message was that the founder had reached a conclusion about where the next meaningful opportunity lies.
Why Plasma Became the Next Step
That next opportunity, for Ebtikar, is Plasma, a Layer 1 blockchain built specifically for stablecoin settlement and distribution. Plasma is described as EVM-compatible and designed for high throughput, near-zero fees, and gasless transfers for assets such as USDT. The protocol also uses a block-based architecture intended to defend against spam transactions. The project’s backers include Founders Fund, Tether CEO Paolo Ardoino, Bitfinex, and Framework Ventures, the latter having led a financing round reported at roughly $20 million to $24 million.
Ebtikar was not a late arrival to the project. Since mid-2024, he had already been an early supporter and adviser to Plasma. After meeting CEO Paul Faecks, he made a personal investment and helped with fundraising, hiring, and strategy. His formal move into the company this week therefore reflects an evolution of an existing relationship rather than a sudden pivot. Now, as chief strategy officer and a member of the founding team, he will take on responsibilities across strategic partnerships, investor relations, and go-to-market execution.
The centerpiece of that work will be Plasma One, a stablecoin-powered digital banking application expected to launch in 2026. The product is being positioned to compete with fintech names like SoFi and Revolut across cross-border payments, savings, and broader financial services. If successful, it would represent a step beyond infrastructure for its own sake and into consumer-facing utility, using stablecoins as the core financial rail rather than as a trading instrument.
From Speculation to Utility
The logic behind the move is closely tied to one of the strongest narratives in crypto today: the shift from speculation toward real-world financial utility. Stablecoins have emerged as one of the industry’s clearest product-market fits, processing trillions in settlement volume annually and serving as a practical bridge between traditional money and blockchain-based transactions. Plasma is trying to position itself as a settlement layer for that activity, betting that stablecoin infrastructure will matter more than another cycle of purely speculative token trading.
Ebtikar’s decision therefore says as much about industry direction as it does about one fund. A manager who successfully produced triple-digit cumulative returns is choosing to leave the hedge fund business and join a stablecoin infrastructure startup. That is a strong statement about where he thinks future value creation will happen. Rather than trying to extract alpha from increasingly efficient crypto markets, he appears to be betting on the companies building rails for payments, savings, and onchain financial services.
In announcing the transition, Ebtikar thanked Split Capital’s limited partners, team, and family. He also described Plasma as what he believes could become one of the best companies in crypto, and characterized the move as a high point in his nine-year career in the industry. Whatever the outcome, the message is clear: one experienced market participant believes crypto’s next chapter will be defined less by traders chasing momentum and more by builders creating infrastructure around stablecoin use cases.