Author: Zen, PANews
As the new year's bell is about to ring, the cryptocurrency industry is entering a new stage of development. In the just-passed 2024, the market experienced recovery, innovation and adjustment, with leading projects continuously consolidating their positions and emerging tracks quietly rising, laying the foundation for the future. In the ups and downs of the year, VCs, as the vane of industry development, not only witnessed the changes in the market, but also shaped the direction of the industry in the intersection of capital, community and technology.
Standing at the starting point of 2025, PANews invited more than ten top VCs to share their observations and thoughts on the cryptocurrency industry. They reviewed the highlights of the past year, analyzed the opportunities and challenges in the current market, and made predictions about future development trends. In this ever-changing field, which projects and tracks are becoming the focus of VCs' attention? Let's take a look at the perspectives of VCs and explore the "yesterday, today and tomorrow" of the cryptocurrency industry.
The most impressive projects in 2024
In the past year, the cryptocurrency industry has ushered in a new wave of growth, driven by both market recovery and technological innovation. From infrastructure upgrades to breakthroughs in emerging tracks, countless projects have emerged and shown strong vitality and innovation potential. Some of them, with their unique technical paths or business models, not only attracted a lot of attention, but also left a deep impression in the industry and beyond.
James Wo, founder and CEO of DFG (Digital Finance Group), pointed out that Hyperliquid initially started as a high-performance perpetual contract decentralized exchange (perp DEX), attracting a large number of users while maintaining fast transaction execution speed and liquidity. In addition, the token launched by Hyperliquid was not backed by VCs or listed on centralized exchanges (CEXs), becoming one of the most successful airdrops in cryptocurrency history. "The platform is expanding its products and launching its own HyperEVM ecosystem, including many native decentralized applications (dApps), to increase the utility of its spot ecosystem. The platform is earning a large amount of fees through on-chain liquidation and market making, gradually eroding the market share of leading DEXs and CEXs."
Chris, co-founder of Web3Port, also highly praised Hyperliquid, being impressed by its market share, community airdrop and distribution mechanism, and wealth effect. In addition, he also mentioned Pump.fun - the most successful Meme coin launch platform this year. Compared to the existing platforms in the market, Pump.fun successfully brought the concept of "Meme launch platform" to the top narrative and ignited the fever of the Meme market. Chris said that the inspiration of Pump.fun is that Web3 projects can achieve success by building truly practical, high-user-experience and market-fit products.
Ryan Rodenbaugh, CEO and co-founder of Wallfacer Labs (vaults.fyi), said that the revival of mature lending protocols such as AAVE and Compound in the DeFi field, as well as the emergence of high-quality new entrants such as Morpho, Euler, and Ajna, are exciting. Although DeFi has not received as much attention as in the past cycles, the quiet success of these protocols is still worth paying attention to and tracking.
Among the answers given by the VCs, Pudgy Penguin is one of the most frequently mentioned projects. Joanna, founder and CEO of Jsquare Group, praised Pudgy Penguin highly, believing that it single-handedly drove the revival of the entire NFT track. "As an early investor and Pudgy NFT holder, I have fully felt the powerful energy of the fusion of Web2 and Web3 thinking emanating from Luca as a representative of the new generation of entrepreneurs, which has also strengthened my conviction in one of the first principles: Invest in the next generation."
"Ethena's USDE stablecoin has performed impressively in the DeFi field, profiting from the high funding rates by establishing long and short positions on centralized exchanges (CEXs)," said Dinghan, partner of Jsquare. Ethena's cooperation with the BlackRock BUIDL fund ensures that USDE can maintain stable returns even when funding rates are negative, further consolidating its long-term viability.
How will the Bitcoin market perform?
Bitcoin showed an amazing growth momentum in 2024. According to CoinGecko data, as of December 31, 2024, the price of Bitcoin has cumulatively increased by 119.1%. This surge was mainly driven by the institutional adoption of spot ETFs, the halving event in April, and the optimistic market sentiment after the US election. Looking ahead to 2025, Chris, co-founder of Web3Port, believes that the Bitcoin bull market is likely to continue, and it is highly probable that Bitcoin will break through $200,000 next year. He said that as the market matures, the supply-demand relationship of Bitcoin will be further strengthened, and Bitcoin below $50,000 may become history in the future bull-bear cycle.
Regarding the potential top of Bitcoin next year, Allen, a research analyst at Ryze Labs, holds a similar view, mainly judging it based on the technical indicators Pi Cycle and 2Y MA Multiplier. He said that historically, the times when these two indicators converged were: December 5, 2013; December 16, 2017; and the most recent Pi Cycle top signal appearance - April 12, 2021. According to historical data, these indicators have relatively high reference value. Allen pointed out that based on the estimation of the 2Y MA Multiplier, the top of Bitcoin may be around $200,000. These two signals have ready-made indicators on TradingView, which can be set with alerts for top judgment and de-risking decisions.
"If I take a cautious view, I think the next cyclical top of Bitcoin may reach a peak of $120,000 to $150,000, and then fluctuate between $100,000 and $150,000," said Evan Lu, investment manager of Waterdrip Capital. He said that based on Trump's statement about establishing a Bitcoin strategic reserve, assuming that the gold market value remains unchanged, as long as Bitcoin's market value does not surpass gold's, Bitcoin can be regarded as a growth asset, and its price may reach $600,000 per coin, but this process may take 5 to 10 years.
Evan said that in the previous halving cycle (i.e., May 2020), Bitcoin experienced a slow rise and reached the first peak in April 2021, from about $9,000 to $65,000. During the period from April to July, due to the impact of the "519 incident", the price of Bitcoin experienced a significant correction. However, the market then ushered in the second wave of rise, eventually reaching the highest point of the previous cycle. If the price on the day of the current halving is taken as the benchmark, this may mark the beginning of a new round of rise. It is expected that by the end of 2024 to the first quarter of 2025, Bitcoin may experience a slight decline or sideways consolidation, and then enter the second wave of rise, during which the price may reach $120,000 to $150,000.
"Unlike the past, the dynamics of this market will be profoundly influenced by multiple factors, the most critical of which are the external liquidity brought by Bitcoin spot ETFs and the sustained capital inflows driven by future Bitcoin reserve policies," Evan believes. This means that from the current period to the next year's peak, the Bitcoin market may no longer experience a significant correction, but maintain a fluctuating upward trend, gradually moving towards higher price levels.
On the topic of Bitcoin, Nemo, investment director of Web3.com Ventures, quoted the statement of MicroStrategy co-founder Michael Saylor: "If you spend 1,000 hours studying, you will become a Bitcoin maximalist. You will realize that this is not just a technology, but a moral imperative. Bitcoin brings freedom, economics and property rights to 8 billion people, and also provides 4 million companies worldwide with the opportunity to invest in non-toxic assets."
Will the "Meme and VC Coin" dispute continue, and what is the solution to the dilemma?
The series of controversies around "VC Coins" has been an important issue that cannot be avoided in the past year. Generative Ventures partner Will Wang proposed a novel perspective and view on this, stating that once the size of a first-round VC fund exceeds $30-50 million, it becomes very difficult to bring excess returns to LPs. Will Wang believes that only with a sufficiently exquisite scale can VCs be forced to delve into the early stage, truly supporting the entrepreneurs who urgently need help, thereby giving birth to real "myths". In contrast, those large-scale VC funds often fall into the trap of expanding their management scale, participating in later rounds, and launching "VC Coins" that are criticized by the market. This approach is actually an old problem of Web2 VCs, and Web3 VCs have not been spared in the past few years.
Here is the English translation of the text, with the terms in <> retained as is:"I believe this situation will gradually be corrected. Whether it is technological or financial innovation, there will always be a stage of non-consensus, and this is precisely the time when VCs should step in. The market will ultimately reward those VCs who dare to act during the non-consensus period," Will Wang added.
What is the essence of the battle between Meme and VC coins? Chris, the co-founder of Web3Port, pointed out that it ultimately comes down to the competition for the stock of market liquidity. In an environment of limited new capital inflows, VC coins, due to their low circulation, high FDV characteristics, and the continuous launch of new VC coin projects, make it difficult for the market to sustain, and the willingness of retail investors to take on the bags has dropped significantly. The advantage of Meme coins lies in their full circulation and fair distribution mechanism, which fits the psychology of market investors, becoming a "new weapon" for retail investors to counterattack institutional advantages.
However, the PVP (player-versus-player) attribute of Meme coins is essentially unsustainable, because except for a few top Meme projects, most Meme coins are unable to have long-term value support. Chris said that from the overall pattern of the crypto market, apart from BTC and ETH, as well as a few DeFi infrastructure projects with stable income sources, the tokens of most other projects are PVP, and market participants compete with each other, with the same source of wins and losses. For the current predicament of VC coins, he believes that there is no good solution in the short term. Against the backdrop of tight market liquidity and the growing strength of institutional investment advantages, the alleviation of the VC coin problem requires going through a complete bull-bear cycle, allowing the market to clear naturally and rebuild trust and fairness.
"Issuing tokens is not the end, but the starting point of the project's real operation," said Evan Lu, an investment manager at Waterdrip Capital. Project parties cannot have the mindset of "financing is profit, and token issuance is cashing out." Instead, they need to seriously consider whether they can truly have application scenarios, whether they can have more stable cash flow income, and whether the project can maintain an active user base and a real community after token issuance.
Jiawei, the main person in charge of IOSG Ventures, frankly admitted that "VC coin projects" need to better consider Token Market Fit, whether there is a need to launch the token, what the use case is, and what kind of token the community will buy, in order to involve a wider community and diversify the holdings to strengthen the alignment of interests.
Which ecosystems, tracks, projects, or outstanding performances are likely to become the industry's stars of tomorrow?
With the rise of the crypto market, new narratives of innovation such as AI and DeSci are driving the industry towards a new stage of development. After going through market cycles, the leading ecosystems have continued to consolidate their moats, while emerging tracks and projects are also quietly rising, accumulating power for future breakthroughs. Looking ahead to the next year, which ecosystems, tracks, and projects are likely to stand out and become the "stars of tomorrow" leading the industry? Many institutions have provided their unique insights.
Will Wang, a partner at Generative Ventures, believes that many people do not fully understand the essence of RWA (Real World Asset). "We believe that the essence of RWA is one thing: to use blockchain to keep accounts for mainstream global financial assets." He said that currently, the penetration rate of this "on-chain accounting" is less than 0.1%. Even if the penetration rate only increases by one order of magnitude, it could spawn multiple secondary assets similar to ONDO and USUAL.
Jiawei, the main person in charge of IOSG Ventures, said that re-pledging will be the grand narrative of 2024, and its impact on token prices has not yet been reflected. With the successive launch of AVS, it may reach its peak in 2025; in addition, ZK-based projects (such as RiscZero and hardware-accelerated Ingonyama) will also gradually demonstrate their market potential.
"AI Agents are likely to become the stars of the crypto industry tomorrow," said Allen, a research analyst at Ryze Labs. AI Agents have the ability to process massive market data, and in the future, they will be able to make real-time and accurate trading decisions, with reaction speeds far exceeding traditional human traders. In the DeFi field, AI Agents can optimize lending rates and liquidity pool pricing mechanisms, significantly improving the efficiency of capital utilization. Furthermore, they also open up new possibilities for the intelligent management of crypto assets, redefining the boundaries of asset management.
In this topic, the PayFi track has been repeatedly mentioned by multiple institutions, undoubtedly a focus of market attention. With the widespread adoption of cryptocurrencies, ecosystems that can realize seamless, low-cost payments are experiencing rapid development. Dinghan, a partner at Jsquare, predicts that projects that connect traditional finance and cryptocurrencies (such as Layer 2 solutions and stablecoin issuers) will receive widespread attention in the future. Those payment protocols that can deeply integrate with mainstream services and conveniently realize the conversion between cryptocurrencies and fiat currencies will become the key force driving the integration of cryptocurrencies into daily life.
The integration of AI and blockchain is also seen as an important direction for future development. Dinghan said that with the rapid rise of decentralized AI infrastructure and AI agents, this field is entering a new growth cycle. Projects that are building decentralized AI networks or AI-driven applications are poised for takeoff and are expected to become new highlights in the industry. "Blockchain provides a trustworthy base layer for AI interaction and transactions, not only enhancing the transparency and security of data, but also opening up new possibilities for the widespread deployment of autonomous AI applications, further accelerating innovation in this field."
Is the long-standing "mass adoption" expected to see a breakthrough? Who will hold the Holy Grail?
"In different areas of the industry, we have already seen some 'mass adoption'," said James Wo, founder and CEO of DFG (Digital Finance Group). Vertical domains like DePIN are attracting Web2 users and providing value to their ecosystems through additional resources. "For example, Helium connects existing Web2 telecom giants through 5G networks, and Render provides low-cost GPU resources to support the gaming, rendering, and AI fields." James believes that the next area that could drive greater adoption may be the payments sector. Infrastructure that can provide efficient crypto payment and fiat conversion solutions for physical stores will drive a new wave of user influx, and as retail investors start to invest and hold crypto assets, this trend will further accelerate.
Zeke, an investment research manager at YBB Capital, believes that based on the recent industry discussion trends, the payments track is likely to become the first track for blockchain "Mass Adoption". Stablecoins have already demonstrated their superiority in efficiency over traditional banking finance in non-US dollar countries, and they also have multiple utilities for residents of third-world countries, such as resisting domestic currency inflation, subscribing to virtual services, and financial investment. Once the regulatory framework is established, the potential of this track is equivalent to the trillions of dollars in the traditional Web2 payment system. The huge demand will also spawn various startups, from upstream stablecoin issuers to downstream payment service providers, which will be a true blossoming.
Joanna, the founder and CEO of Jsquare Group, expressed an optimistic attitude towards the progress of "mass adoption" next year. She said that mass adoption involves bringing in money (institutions/retail) on one hand, and bringing in user traffic (mainly retail) on the other. The possibility of traditional institutions entering the market driven by policy factors is relatively high, while on the retail level, the Solana ecosystem has a leading advantage in terms of ecosystem positioning and track selection. At the same time, Joanna has high hopes for Pudgy Penguins in her investment portfolio, expecting it to achieve a breakthrough in the future, and believes that Luca can set a benchmark for the new generation of entrepreneurs.
Ryan Rodenbaugh, CEO and co-founder of Wallfacer Labs (vaults.fyi), said that the breakthrough will be driven by new front-end user experiences that make it easier for less experienced users to start using DeFi. In addition, products with existing distribution channels (such as wallets) providing seamless DeFi experiences through embedded interactions will also be key.
What stage of the bull market are we in, and where will it lead?
"Currently, we may be in the mid-stage of the bull market, and as for when it will end, we believe we need to consider the significance of the Bitcoin ETF approval," said Zeke, an investment research manager at YBB Capital. ETF puts Bitcoin within a centralized regulatory framework, making the trading legal and fully regulated, which also means that a wider range of financial derivatives will be created. As more legitimate participants get involved, this will directly reduce the price volatility of the market. So in the future, we are unlikely to see the possibility of a sharp correction or a significant decline in the short term, and with the weakening of the periodic impact of Bitcoin halving, the market will shift from the previous rapid bull-bear cycles to a long-term slow bull market.
James Wo, the founder and CEO of DFG (Digital Finance Group), also commented on the long-term outlook of the market. We may currently be in the "optimistic stage" of the market cycle, as those who were previously skeptical of cryptocurrencies are now starting to purchase and hold some crypto assets, and more and more institutions and governments are expressing interest in the crypto industry. The return of the Trump administration will also drive a more crypto-friendly regulatory environment, and the proposal to establish a Bitcoin strategic reserve will undoubtedly further boost the market's interest and confidence in Bitcoin and the entire crypto industry.
"Predicting the end of the market cycle is somewhat counterintuitive," James added. If we expect a market crash like in 2022, this scenario is unlikely to happen, as the crypto environment has already improved and developed. Many institutions have started to emulate Microstrategy's large-scale accumulation of Bitcoin, so it is unlikely to see the market cycle "end" and experience an 80% plunge. There may be adjustments in the future, but it is unlikely to return to the levels of the bear market.
Nemo, the Investment Director of Web3.com Ventures, believes that in the short term, Bitcoin has already completed at least half of the bull market process. He stated that from an optimistic and faith-based perspective, Bitcoin will not let anyone down. The essence of Bitcoin is to fight inflation and protect wealth.
How should retail investors seize the opportunities in the bull market?
Chris, the co-founder of Web3Port, advises retail investors to focus on high-certainty tracks, with a focus on BTC, Meme coins, and the AI narrative track, and to invest cautiously in old Altcoins that lack new narrative support. Additionally, they should learn to go with the flow, understand market trends, and closely follow the hotspots and attention gathering points. "Cycles are the core of the market, and it is important to position oneself in time when the cycle arrives and to exit in time before the cycle fades."
Allen, a research analyst at Ryze Labs, stated that the bull market is actually the main reason why most people lose money. "Investors may have made unexpected gains in the early stage, but in the middle stage, they start to use borrowed funds and leverage, and ultimately, in a rapid correction, all their unrealized gains turn into unrealized losses, and they are even forced to cut their losses and exit." Allen believes that to avoid this situation, the best strategy is to prepare a sum of money that will not affect one's current life even if it is completely lost, and to withdraw the cost at the appropriate time, ensuring that the remaining funds in the market are all profits. The worst practice is to continuously add to the principal and keep investing, and when the principal is insufficient, to resort to leverage. This operation may seem to be able to quickly expand the returns, but in fact the risk is extremely high, and once the market experiences violent fluctuations, the consequences are often unimaginable.
Zeke, the Investment Research Manager of YBB Capital, also pointed out the potential risks of the bull market: "The changes in the market over the next 25 years will be more complex than in the past, and the overall investment strategy needs to be more stable than before 24 years. The more the market rises, the more dangerous it actually is. None of us can accurately predict the direction of the market. In 2025, we should have more awe towards the changes in the market." Zeke said that investment trading is a practice, and the crypto market is developing towards a more mature and professional trend. Investors should first cultivate themselves internally before learning externally, and it is particularly important to maintain a stable and strong internal core, always putting risk first.
Dinghan, a partner at Jsquare, suggests that retail investors should prioritize risk management. "Although cryptocurrencies have significant return potential, their volatility is still a key issue." He added that for those seeking passive investment, blue-chip assets like Bitcoin and Ethereum are usually safer choices. For more actively involved investors, security is crucial - using hardware wallets and trusted security tools. Focus on high-quality, sustainable projects, rather than chasing short-term trends. In any market, it is crucial to identify assets that outperform the broader market, rather than holding assets that lag behind.
