Author: Yogita Khatri, The Block; Translated by Tao Zhu, Jinse Finance
The crypto world has been in a whirlwind over the past few days, with Bitcoin prices breaking the $93,000 mark after Donald Trump's election victory. Reflecting back on when I first started writing about cryptocurrencies in 2018, seeing Bitcoin's price at around $3,000 felt crazy. But here we are, witnessing the unfolding of the future.
I spoke with over a dozen crypto venture investors, and while the excitement over Trump's win and Bitcoin's rise is undeniable, most are sticking to their long-term plans. That is, some are adjusting their approaches to more closely monitor new trends and shifts in the political and market landscape.
"I think the industry is rightfully euphoric," Lasse Clausen, founding partner at 1kx, told me. "You have to be an insider to truly understand the scale of innovation-stifling regulation under the previous administration. So with founders now free to try again, outsiders still underestimate how much exciting product this industry will create."
Arianna Simpson, general partner at a16z crypto, echoed Clausen's sentiment and noted that "the past few years have been challenging for the crypto industry." However, she expects "major policy shifts" to greatly benefit web3 builders and companies.
Given the expected clarity on crypto regulation under the Trump administration, investors anticipate more founders will start venturing into web3. Earlier this week, Portal Ventures, founded by former Insight Partners investor Evan Fisher, raised $75 million for its second fund, which manages over $800 million in AUM, to exclusively invest in crypto seed-stage startups. Fisher told me he expects repeat founders who previously sold their businesses and sat on hundreds of millions but hesitated to enter crypto due to legal and regulatory risks will now jump in as the regulatory environment has eliminated the risks. "We'll see high-caliber founders start to enter the crypto space more," Fisher said.
Jake Brukhman, founder, managing partner and CEO of CoinFund, told me his firm is preparing for a "supercycle" in the crypto markets. Brukhman said CoinFund has ample capital for seed, venture and liquid investments, and added that the firm has hired 6 new employees this year, expanding its investment team, 5 of whom joined in the past 2-3 months.
Betting on Crypto AI, DeFi and More
Looking ahead, crypto venture firms are eyeing high-potential areas like crypto AI, DeFi, tokenization of real-world assets (RWA), infrastructure, stablecoins, and payments.
Many investors see the intersection of crypto and AI as the next transformative trend. Ed Roman, co-founder and managing partner of Hack VC, described crypto AI as the "undisputed sexiest category in crypto right now" and envisioned a multi-layered web3 AI stack leveraging the cost-efficiency of decentralized computing networks. "For serving web2 customers, this is a multi-trillion dollar market," Roman said. "AI is not a fad (like NFTs). AI is creating real business value and may be the most important technological innovation since the smartphone and the internet."
However, Roman said the health of the crypto AI category largely depends on the health of the web2 AI category, which is inspired by NVIDIA. So Hack VC is closely watching NVIDIA as a "loose proxy" for crypto AI.
Balder Bomans, CIO and executive partner at Maven 11 Capital, also sees a growing number of crypto AI startups, particularly those focused on AI-driven DePIN protocols that provide compute for training AI models. CoinFund's Brukhman added that most retail investors looking to get exposure to AI next year may do so through crypto. "AI coins are scarce but in high demand. Summer 2025 is the summer of decentralized AI (deAI)."
Another focus for investors is the resurgence of DeFi as institutional adoption increases. Hack VC's Roman pointed out that DeFi has recently suffered losses due to high yields, making US Treasuries more attractive. However, Roman added, the rate cuts expected under Trump may make DeFi more competitive relative to traditional finance (TradFi) tools like Treasuries. He sees DeFi as a "once-in-a-lifetime opportunity" to simplify finance.
1kx's Clausen noted that TradFi institutions may now be working to bring RWA on-chain and scale the use of DeFi infrastructure. Clausen said: "Think about how terrible trading, clearing and settlement is in TradFi, whereas DEX trading is a three-in-one instant trade with no counterparty risk and no publicly verifiable exchange operator fraud." "It's like fishing with dynamite; it's not even fair."
Erick Zhang, managing partner at Nomad Capital and former executive at Binance, also sees DeFi poised for growth, especially as Altcoins reactivate and centralized exchanges face ongoing challenges.
Will Nuelle, general partner at Galaxy Ventures, and Thomas Klocanas, general partner and head of venture at BlockTower Capital, also foresee expansion in DeFi, RWA tokenization, stablecoins and payments.
"Post-Trump, it's clear that one of the biggest barriers to stablecoin adoption in payments - the banking relationships to interface with the fiat system - has become easier," Nuelle said. "We hope/expect banks providing legitimate crypto services will not fear retaliation from the FDIC or other agencies, which should alleviate banks' ability to integrate with the clearly growing use cases."
Consumer applications and infrastructure categories are also gaining more attention. a16z crypto's Simpson said she is "particularly excited about the takeoff of crypto consumer apps, as this category was especially adversely impacted by the policies of the outgoing administration." "We remain very interested in DePIN and the continued development of infrastructure projects."
Alvaro Gracia, partner at Borderless Capital, also emphasized the potential growth in DeFi and DePIN areas as Bitcoin's dominance shifts towards Altcoins. Gracia manages a $100 million DePIN fund and remains particularly bullish on the category, noting the fund still has around $70 million available to deploy over the next 2-3 years.
Clausen of 1kx added that infrastructure, middleware and consumer applications are focus areas for his firm, particularly consumer apps requiring bank integrations, which were previously hindered by regulatory constraints.
Adam Winnick, managing director at Finality Capital Partners, is optimistic about the infrastructure vertical, highlighting re-staking and zero-knowledge tech startups as focus areas. Miko Matsumura, managing partner at Gumi Cryptos Capital, said he is focused on "middleware" infrastructure projects aimed at solving "normal people's normal problems" rather than "crypto people's crypto problems".
Meanwhile, for some investors, infrastructure is not as exciting. Maven 11's Bomans noted his firm has shifted its focus to application-level investments over the past 12 months, as the rise of robust overall chains and continued improvements in modular stacks have eliminated major scaling bottlenecks.
Fisher of Portal Ventures said his firm has lacked infrastructure projects, instead favoring commercial startups with clear distribution advantages and strong user demand.
Zhang of Nomad Capital also mentioned that the company is more cautious in deploying capital in infrastructure projects (especially the first and second layer networks). "Most infrastructure projects are essentially 'infrastructure memes' in nature, and their success often depends on the ability of the founding team to effectively manage the narrative and branding," he said. "However, teams that can perform exceptionally in this unique dynamic are still limited."
Risks of the Trump Administration
Although Trump's presidency has brought new optimism to the cryptocurrency sector, several venture capitalists have warned of potential risks that could affect the industry's development trajectory.
Clausen of 1kx expressed concerns over Trump's immigration policies, believing that a reduced labor supply could lead to wage increases, which could be detrimental to risk assets like cryptocurrencies.
Nuelle of Galaxy Ventures pointed out that if "Trump becomes too laissez-faire towards the crypto industry," it could repeat the failure of FTX. He stated that balanced bipartisan legislation and overall clarity on the status of digital assets will create the most stable long-term value.
Zhang of Nomad Capital emphasized that if bold proposals such as making Bitcoin the official currency of the United States are put forward, the "Trump effect" may lose momentum. The strategic reserve asset may fail to be quickly realized. He stated that unmet expectations could dampen market enthusiasm.
Roman of Hack VC also stated that one of the most important pending questions is: will the United States actively stockpile new Bitcoins, or simply hold the existing seized Bitcoins? Either outcome could be a victory for cryptocurrencies. Actively building a Bitcoin reserve could become a new standard, influencing other countries and their policies, which would be an even greater victory for cryptocurrencies.
