A dozen cryptocurrency venture capitalists share their next steps following Trump's victory and Bitcoin's surge.
Author: Yogita Khatri
Translation: Plain Language Blockchain
In the past few days, the cryptocurrency world has been tumultuous, with Bitcoin quickly breaking through $93,000 after Trump's election victory. Reflecting on when I started writing about cryptocurrency in 2018, Bitcoin was priced at about $3,000, and now I witness the rapid development of this market.
I spoke with a dozen crypto venture capital investors, and while everyone expressed excitement about Trump's victory and Bitcoin's rise, most insisted on their long-term investment plans. However, some investors are adjusting their strategies to focus more on new trends and changes in the political and market environment.
Lasse Clausen, founding partner of 1kx, said, "The excitement across the industry is justified. Outsiders find it difficult to understand the previous administration's suppression of innovation, and now founders can experiment freely, leading to many exciting new products being born."
Arianna Simpson, a partner at a16z crypto, expressed similar views, noting that "the past few years have been challenging for the crypto industry," but she expects significant policy shifts to greatly benefit builders and companies in Web3.
With the Trump administration likely bringing clarity to crypto regulation, investors expect more founders to enter the Web3 space. Earlier this week, Portal Ventures, founded by former Insight Partners investor Evan Fisher, raised $75 million to focus on investing in crypto startups with its second fund. Fisher believes that successful entrepreneurs who previously hesitated to enter the crypto space due to legal and regulatory risks will now participate more actively. He stated, "We will see more top founders gradually entering the crypto industry."
Jake Brukhman, the founder and CEO of CoinFund, stated that the company is preparing for the upcoming "super cycle" in the crypto market. CoinFund is well-funded in seed rounds, venture capital, and liquidity investments, and has expanded its team by six new members this year, five of whom joined in the past two to three months.
1. Betting on areas like crypto-AI and DeFi
Looking ahead, crypto venture capital is focusing on high-potential sectors, including crypto-AI, DeFi, RWA (real-world asset) tokenization, infrastructure, stablecoins, and payments.
Many investors believe that 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 the crypto space right now," and anticipates a multi-layered Web3 AI ecosystem that leverages decentralized computing networks cost-effectively. He believes, "This market can reach trillions of dollars when serving Web2 customers. AI is not just a fleeting trend like NFTs; it is creating real business value and could be the most significant 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 Web2 AI, especially NVIDIA. Therefore, Hack VC regards NVIDIA as a "loose indicator" for crypto-AI.
Balder Bomans, Chief Investment Officer and managing partner at Maven 11 Capital, believes that crypto-AI startups will grow, especially favoring decentralized DePIN protocols that provide computing resources for AI model training. CoinFund's Brukhman added that most retail investors wishing to get involved in AI may achieve this through cryptocurrency next year. "AITokens 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 revival of DeFi as institutional adoption increases. Roman from Hack VC stated that DeFi was recently impacted due to high interest rates making U.S. Treasury bonds more attractive. However, it is expected that Trump will lower interest rates, which may give DeFi a competitive edge against traditional financial (TradFi) tools like Treasury bonds. He sees DeFi as a once-in-a-century opportunity to greatly simplify financial processes.
Clausen from 1kx pointed out that traditional financial institutions may realize RWAs on-chain and utilize DeFi infrastructure at scale. "Think about how complex trading, clearing, and settlement are in traditional finance, while these operations can be completed in a single moment on decentralized exchanges (DEX) with no counterparty risk, and the transparency of transactions can be publicly verified," Clausen said. "It's just like 'fishing,' effortless."
Erick Zhang, managing partner at Nomad Capital and former Binance executive, also believes that DeFi is poised for growth, especially in the context of increased altcoin activity and challenges facing centralized trading platforms. Will Nuelle from Galaxy Ventures and Thomas Klocanas from BlockTower Capital also see growth potential in DeFi, RWA tokenization, stablecoins, and payments.
Nuelle stated, "After Trump took office, one of the biggest obstacles to the adoption of stablecoins in payments—the banking relationship with fiat systems—has become smoother. We hope and expect that banks providing legitimate services for cryptocurrencies will no longer fear retaliation from the Federal Deposit Insurance Corporation (FDIC) or other agencies, which will help banks better integrate with the growing use cases."
2. Consumer-facing applications and infrastructure categories are also gaining attention
Simpson from a16z crypto expressed, "I am particularly excited about consumer applications in the crypto space, as this category has been greatly affected by the previous administration's policies. We remain very focused on the ongoing development of DePIN and infrastructure projects."
Alvaro Gracia, partner at Borderless Capital, also pointed out that as Bitcoin's dominance shifts towards altcoins, growth is expected in DeFi and DePIN sectors. He currently has about $70 million available for investment from the $100 million DePIN fund he manages, and Gracia is particularly optimistic about such projects.
Clausen from 1kx added that the company's focus is on infrastructure, middleware, and consumer applications, especially those requiring bank integration, which have previously been impeded by regulatory restrictions.
Adam Winnick, managing partner of Finality Capital Partners, expressed optimism about the infrastructure vertical, particularly emphasizing startups focused on re-staking and zero-knowledge technology. Miko Matsumura, managing partner at Gumi Cryptos Capital, focuses on underlying and scalable infrastructure projects, aiming to solve "normal problems for ordinary people," rather than just addressing "issues within the crypto industry."
Meanwhile, some investors' enthusiasm for infrastructure has waned. Bomans from Maven 11 mentioned that as strong monolithic chains rise and the modular tech stack continues to improve, the company's investment focus has shifted to application-layer projects over the past year.
Fisher from Portal Ventures stated that the team is investing less in infrastructure projects, preferring commercial startups with clear distribution advantages and user demand.
Zhang from Nomad Capital also mentioned that they are more cautious in investing in infrastructure projects, particularly Layer 1 and Layer 2 networks. He believes, "Most infrastructure projects are essentially 'infrastructure memes,' and their success often depends on the founding team's ability to effectively manage 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 has brought new optimism to the crypto space, several venture capitalists have warned of potential risks that may affect the industry's development.
Clausen from 1kx expressed concerns about Trump's immigration policies, believing that a reduced labor supply could lead to sustained wage inflation, which could be a negative factor for risk assets like cryptocurrencies.
Nuelle from Galaxy Ventures pointed out that if Trump is "too lenient" towards the crypto industry, it could lead to a repeat of the FTX debacle. He believes that balanced bipartisan legislation and clear status for digital assets could create the most stable long-term value for the market.
Zhang from Nomad Capital mentioned that if bold proposals like Bitcoin becoming a U.S. strategic reserve asset do not materialize quickly, it may lead to decreased market enthusiasm, resulting in a situation where the "Trump effect" loses momentum.
Roman from Hack VC believes that the key issue is whether the U.S. will actively accumulate new Bitcoins or merely hold existing confiscated Bitcoins. Either way, it would be a positive for the crypto market. However, if the U.S. actively accumulates Bitcoins, it could encourage other countries to follow suit, subsequently affecting global policies, which would have a more profound impact on 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
