Author: Yogita Khatri
Translator: Bai Hua Blockchain
In the past few days, the cryptocurrency world has been in turmoil, with BTC quickly breaking through $93,000 after Trump's victory in the election. Recalling when I started writing about cryptocurrencies in 2018, the price of BTC was only around $3,000, and now I have witnessed the rapid development of this market.
I have spoken with more than a dozen crypto venture capitalists, and although everyone is excited about Trump's victory and the rise of BTC, most of them still adhere to their long-terminvestment plans. However, some investors are also adjusting their strategies, paying more attention to new trends and changes in the political and market environment.
Lasse Clausen, founding partner of 1kx, said: "The excitement across the industry is justified. It is difficult for outsiders to understand the suppression of innovation by the previous administration, and now founders can freely experiment, which will lead to many exciting new products."
Arianna Simpson, partner at a16z crypto, expressed a similar view, noting that "the past few years have been challenging for the crypto industry", but she expects major policy changes to greatly benefit Web3 builders and companies.
With the prospect of clearer crypto regulations under the Trump administration, investors expect to see more founders entering the Web3 space. Earlier this week, Portal Ventures, founded by former Insight Partners investor Evan Fisher, raised $75 million for its second fund focused on investing in crypto startups. Fisher believes that successful entrepreneurs who previously hesitated to enter the crypto field due to legal and regulatory risks will now be more proactive. He said: "We will see more top-tier founders gradually entering the crypto industry."
Jake Brukhman, founder and CEO of CoinFund, said the company is preparing for an impending "super cycle" in the crypto market. CoinFund has ample capital for seed, venture, and liquidity investments, and has added six new members this year, five of whom joined in the past two to three months.
1. Betting on Crypto-AI, DeFi and other high-potential tracks
Looking ahead, crypto VCs are focusing on high-potential tracks, including Crypto-AI, DeFi, RWA (Real World Asset) Tokenization, infrastructure, stablecoins, and payments.
Many investors believe the combination of Crypto and AI is the next disruptive trend. Ed Roman, co-founder and managing partner of Hack VC, called Crypto-AI the "hottest category in crypto right now" and foresees a multi-layered Web3 AI ecosystem that leverages the cost-effectiveness of decentralized computing networks. He believes: "This market, when serving Web2 customers, can reach a scale of trillions of dollars. AI, unlike Non-Fungible Tokens, is creating real business value and may be the most important technological innovation since the mobile phone and the internet."
However, Roman pointed out that the healthy development of Crypto-AI largely depends on the performance of the Web2 AI domain, especially NVIDIA. Therefore, Hack VC is closely monitoring NVIDIA as a "loose indicator" for Crypto-AI.
Balder Bomans, Chief Investment Officer and Managing Partner of Maven 11 Capital, believes Crypto-AI startups will grow, particularly optimistic about decentralized DePIN protocols that provide computing resources for AI model training. CoinFund's Brukhman added that most retail investors hoping to venture into AI may achieve this goal through cryptocurrencies next year. "AI Tokens are scarce and in high demand. The summer of 2025 will be the summer of decentralized AI (deAI)," he said.
Another investment focus is the resurgence of DeFi as institutional adoption increases. Hack VC's Roman said DeFi has recently been impacted by the increased attractiveness of US Treasuries due to high interest rates. However, with the expectation of rate cuts under Trump, DeFi may have a greater advantage in competing with traditional finance (TradFi) tools like Treasuries. He sees DeFi as a "once-in-a-century" opportunity to greatly simplify financial processes.
1kx's Clausen pointed out that traditional financial institutions may achieve on-chain RWA and use DeFi infrastructure on a large scale. "Just think about how complex trading, clearing, and settlement are in traditional finance, while on a decentralized exchange (DEX), these operations can be completed in a single transaction, with no counterparty risk and verifiable transparency. It's like 'fishing with dynamite' - effortless," Clausen said.
Erick Zhang, Managing Partner of Nomad Capital and former Binance executive, also believes DeFi is poised for growth, especially in the context of increased Altcoin activity and challenges facing centralized exchanges. Will Nuelle, General Partner at Galaxy Ventures, and Thomas Klocanas of BlockTower Capital are also optimistic about the expansion of DeFi, RWA Tokenization, stablecoins, and payments.
Nuelle said: "After Trump's inauguration, one of the biggest obstacles to the adoption of stablecoins in payments - the banking relationship with the fiat system - has become smoother. We hope and expect that banks that legally serve cryptocurrencies will no longer fear retaliation from the FDIC or other agencies, which will help them better integrate with the growing use cases."
2. Consumer applications and infrastructure categories are also gaining attention
a16z crypto's Simpson said: "I'm particularly excited about consumer applications in crypto, as this category was severely impacted by the policies of the previous administration. We remain very focused on the continued development of DePIN and infrastructure projects."
Alvaro Gracia, partner at Borderless Capital, also noted that as BTC's dominance shifts to Altcoins, the DeFi and DePIN sectors are poised for growth. His $100 million DePIN fund currently has about $70 million available for investment over the next two to three years, and he is particularly optimistic about such projects.
1kx's Clausen added that the company's focus is on infrastructure, middleware, and consumer applications, especially those that require bank integration, which were previously hindered by regulatory constraints.
Adam Winnick, Managing Partner of Finality Capital Partners, is optimistic about the infrastructure vertical, particularly emphasizing re-pledging and zero-knowledge tech startups. Miko Matsumura, Managing Partner of Gumi Cryptos Capital, focuses on base-layer and scalability infrastructure projects, aiming to solve "normal people's normal problems" rather than just "crypto industry-internal problems".
At the same time, some investors' enthusiasm for infrastructure has waned. Maven 11's Bomans mentioned that with the rise of powerful monolithic chains and the continued improvement of modular technology stacks, the company's investment focus has shifted to application-layer projects over the past year.
Fisher of Portal Ventures said the team has invested less in infrastructure projects, preferring commercial startups with clear distribution advantages and user demand.
Erick Zhang of Nomad Capital also mentioned that they are more cautious about infrastructure projects, especially Layer 1 and Layer 2 networks. He believes: "Most infrastructure projects are essentially 'infrastructure memes', their success often depends on the founding team's ability to effectively manage the narrative and branding, but the number of teams with this unique dynamic is limited."
3. Potential Risks of the Trump Administration
Although Trump's election as president has brought new optimism to the crypto industry, several VCs have warned of potential risks that could impact the industry's development.
1kx's Clausen expressed concern about Trump's immigration policy, believing that a reduced labor supply could lead to persistent wage inflation, which could be a negative factor for risk assets like cryptocurrencies.
Will Nuelle of Galaxy Ventures pointed out that if Trump is "too laissez-faire" towards the crypto industry, it could repeat the FTX debacle. He believes that balanced bipartisan legislation and a clear position on digital assets can create the most stable long-term value for the market.
According to Zhang of Nomad Capital, if the bold proposal for Bitcoin to become a strategic reserve asset of the United States fails to materialize quickly, it may lead to a weakening of market enthusiasm, resulting in a "Trump effect" where the momentum is lost.
Roman of Hack VC believes that the key question is whether the United States will actively accumulate new Bitcoins or only hold the confiscated Bitcoins. Either way, it is positive for the crypto market. However, if the United States actively accumulates Bitcoin, it may lead to other countries following suit, which would have a more far-reaching impact on global policies and the entire crypto market.
Article link: https://www.hellobtc.com/kp/du/11/5538.html
Source: https://www.theblock.co/post/326970/the-funding-trump-bitcoin-crypto-vcs
