While it's true that VCs are acting mostly based on FOMO and herd mentality, there's also another incentive at play here: Tokens. Crypto VCs get paid in tokens,

While it's true that VCs are acting mostly based on FOMO and herd mentality, there's also another incentive at play here: Tokens. Crypto VCs get paid in tokens, and thus they have the additional incentive to create as much fluff PR and hype as they possible can to drive up the token price. While this is true for traditional startups as well (good PR helps), the cause-effect relationship is much more obvious for tokens because you don't need to have product-market fit to drive up price. As a VC you just need to exit before the other gullible VCs, even if you know it'll end up as a scam. It's essentially a VC-level rug pull.