Compiled by | TechFlow
Quick Overview
● In 2024, crypto venture capital financing grew 28% year-over-year to $13.7 billion, but still did not reach its historical peak.
● Top crypto VCs believe that in 2025, capital will mainly flow to startups that demonstrate strong product-market fit.
According to The Block Pro's financing data, crypto venture capital financing saw significant growth in 2024, up 28% year-over-year to around $13.7 billion. While this performance is an improvement over 2023, when the overall market sentiment was more optimistic, it has not yet recovered to its previous historical high.
Looking ahead to 2025, top crypto VCs have a cautiously optimistic outlook on the future. While most believe financing levels are unlikely to return to the highs of 2021-2022, there is a consensus that startups demonstrating strong product-market fit and having an actual user base will be more likely to attract capital.
Here are the specific views of leaders from institutions such as Dragonfly, Pantera, Multicoin, Coinbase Ventures, Binance Labs, and Galaxy Ventures on the financing prospects for 2025.
Dragonfly: Betting on DeFi, CeFi and Stablecoins
Dragonfly's general partner Rob Hadick said that crypto venture capital financing is expected to see significant growth in 2025 due to the gradual relaxation of the US regulatory environment, the potential for continued token price appreciation, and the accelerated inflow of institutional capital. However, he also pointed out that financing levels are unlikely to return to the highs of 2021-2022 in the short term, reflecting the caution of VC firms to avoid repeating past mistakes.
Dragonfly is currently focused on supporting exceptional founders who have demonstrated clear product-market fit in areas such as decentralized finance (DeFi), scaling platforms, centralized finance (CeFi) and stablecoins/payments. While emerging areas like crypto AI and decentralized physical infrastructure networks (DePINs) are also on the radar, Hadick said these areas are still in the experimental stage.
In contrast, investment in traditional areas such as security, tokenization and interoperability may decrease, as the market's focus is gradually shifting towards newer directions. He also predicted that decentralized social media will face significant challenges due to a lack of scalability and product-market fit.
Pantera: Bullish on Crypto AI, DePINs and New Layer 1s
Pantera Capital's general partner Lauren Stephanian said that with investors' confidence in US crypto-friendly policies increasing, crypto venture capital financing is expected to grow further in 2025.
However, she also warned that "the bull market won't last forever," and therefore "it remains to be seen when we'll start to see a slowdown in capital deployment next year."
Pantera is continuing to invest broadly in the crypto and blockchain space, but is particularly bullish on crypto AI, DePINs, and new Layer 1s that support more application-level functionality.
Multicoin: Continuing to Bet on the Solana Ecosystem
Multicoin Capital is increasing its exposure to DeFi applications, particularly within the Solana ecosystem. According to Multicoin Capital's co-founder and managing partner Kyle Samani, Solana has outperformed Ethereum and Layer 2 ecosystems in key on-chain metrics this year. "We expect this trend to continue, and Solana ecosystem applications and protocols will stand out in the next cycle as more users, capital, project launches, and activity migrate to Solana."
Samani also pointed out that Ethereum may continue to face challenges and "could even enter a prolonged decline" as it faces fierce competition from Solana and other faster, cheaper blockchains. "Unless Ethereum can improve its competitiveness, developers, users, and capital will shift to other chains that better meet their needs."
Furthermore, Multicoin is highly confident in stablecoins. Samani described stablecoins as "potentially one of the most important technological and financial innovations of our generation."
"Stablecoins are poised to become a formidable force in 2025," Samani said. "There is a huge global demand for the US dollar, and stablecoins are the most effective way to access the dollar. The design space in this area is vast, and we are still relatively early in the adoption curve."
Coinbase Ventures: Focused on On-Chain Economics, Deploying to the Application Layer
Coinbase Ventures' Hoolie Tejwani told The Block that the firm expects to remain "highly active" in 2025 and beyond, and is already positioned to seize market opportunities. Tejwani is optimistic about the potential for positive regulatory developments in 2025 with the arrival of a crypto-friendly Trump administration and a supportive Congress in January.
Tejwani revealed that Coinbase Ventures will continue to invest broadly around on-chain economics, focusing on "where the best developers are putting in effort on nights and weekends." He is particularly bullish on the application layer, as infrastructure matures and internet-scale applications become viable. Focus areas include stablecoin payments and finance, cross-applications of crypto AI, on-chain consumer applications (such as social, gaming, and creator tools), and DeFi innovations.
At the same time, Tejwani emphasized that Coinbase Ventures has not completely abandoned the infrastructure layer, as there are still unresolved technical challenges and potential for innovation in the tools space.
Binance Labs: Focusing on Fundamentals and User Adoption
Binance Labs, Binance's $10 billion venture capital and incubation arm, says its investment director Alex Odagiu that the company has always been a "evergreen" investor, continuously supporting startups in web3, AI, and biotech, regardless of market cycles.
Odagiu expects crypto venture capital to maintain strong momentum in 2025, but emphasizes that Binance Labs will "focus on fundamentals" rather than chasing price fluctuations or market hype. He pointed out that projects with real-world use cases, product-market fit, strong teams, and sustainable revenue models will be the most competitive.
Galaxy Ventures: Bullish on Stablecoins and Tokenization
Galaxy Ventures' general partner Will Nuelle said that stablecoins, especially in the payments space, continue to demonstrate strong product-market fit and are a core focus for the firm's capital deployment. While tokenization has lagged behind stablecoins in terms of adoption, he sees tremendous investment potential in this area and plans to further explore these opportunities.
Although tokenization is still behind stablecoins in terms of adoption, Nuelle sees great potential for investors. Galaxy Ventures plans to further explore these opportunities. However, Nuelle is not very optimistic about metaverse-related projects, predicting that capital will lag in 2025 due to a lack of clear signs of adoption.
Hashed: Cautious Deployment, Expanding Global Investments
Hashed's CEO and managing partner Simon Seojoon Kim has a cautiously optimistic outlook on the market prospects for 2025. He mentioned that Trump's comments about Bitcoin potentially becoming a US Treasury asset may hint at a potential shift in institutional sentiment. However, he believes financing levels are unlikely to return to the highs of 2021-2022 in the short term, unless there is a "black swan" event in the macroeconomic or geopolitical realm.
Kim believes the market development in 2025 will be influenced by factors such as further clarity in the US regulatory environment, growth in institutional activity in Asian markets, and infrastructure advancements enabling real-world applications. However, he also warned that regulatory uncertainty, macroeconomic pressures, and geopolitical tensions could dampen market growth.
Hashed's investment focus will be on areas such as data infrastructure, institutional-grade DeFi applications, regulated stablecoin payment systems, and crypto AI infrastructure, which are seen as having clear product-market fit and mature business models. In contrast, he expects speculative GameFi projects, undifferentiated Layer 1 and Layer 2 protocols, and NFT platforms lacking real revenue models to face reduced financing.
Hashed plans to complete the fundraising for its third venture capital fund in the first quarter of 2025, and plans to launch a new investment vehicle in Abu Dhabi to enable direct token investments in accordance with the local regulatory framework. Kim said this is aimed at addressing the limitations of registered funds in Korea in terms of direct token investment capabilities.
Hack VC: Betting on Crypto AI, Infrastructure, and DeFi
Hack VC's co-founder and managing partner Ed Roman expressed optimism about the prospects of crypto venture capital in 2025, expecting the market to grow significantly, provided that there are no unforeseen "black swan" events. He pointed out that a crypto-friendly policy environment and the resurgence of web3 entrepreneurial enthusiasm will be key drivers of this growth.
Hack VC's investment focus is concentrated in three main areas: crypto AI, infrastructure, and DeFi. Roman explained that decentralized physical infrastructure networks (DePINs) leveraging GPUs provide a low-cost way to build multi-layered AI technology stacks, compared to traditional web2 cloud services, and the potential market size in serving web2 customers in the crypto space could reach trillions of dollars.
In the infrastructure space, Hack VC is bullish on the development of scalability protocols, modular infrastructure, web3 security, Maximal Extractable Value (MEV) improvements, and account abstraction technology. The maturation of these technologies significantly improves the user experience of decentralized applications.
In the DeFi domain, Hack VC believes the current period represents a "once-in-a-century opportunity" to reshape the financial system. Roman is particularly optimistic about stablecoin-based payments, as their widespread practical application could spawn a "multi-trillion dollar market." However, the firm is not very optimistic about the prospects of NFTs, expecting most NFTs to lose value, with only a few blue-chip assets able to retain their value.
Portal Ventures: Supporting Platforms with Both Infrastructure and Applications
Portal Ventures' founder and general partner Evan Fisher expects the market sentiment to improve in 2025, but the funding levels may not recover to the peaks of 2021-2022, as those two years had unique macroeconomic conditions.
Fisher told The Block that Portal Ventures is bullish on platforms that can provide both infrastructure and applications. Such platforms not only allow projects to better control the user experience, but also drive the implementation of real-world use cases. However, he also pointed out that investments in heavier infrastructure projects, such as zero-knowledge development platforms and middleware, may slow down, primarily due to the lack of a sufficient customer base and sustainable business models in these areas.
Blockchain Capital: Focusing on Stablecoin Infrastructure and DeFi
Blockchain Capital's general partner Kinjal Shah expects the funding levels to increase in 2025 as the market performance continues to improve. However, she believes the peak funding levels of 2021-2022 are unlikely to be repeated, as the growth at that time was largely driven by macroeconomic trends.
Shah stated that Blockchain Capital will continue to maintain a flexible investment strategy, focusing on a few key areas, including stablecoin infrastructure, innovative distribution models, and DeFi platforms that can connect institutions and retail investors.
