In 2024, crypto venture capital funding grew by 28% to $13.7 billion but failed to reach past peaks. Top crypto venture capitals expect funding in 2025 to concentrate on startups that demonstrate strong product-market fit.
Article by: Yogita Khatri, Venture Capital
Source: The Block
Article translated by: Baihua Blockchain
According to funding dashboard data from The BlockPro, crypto venture capital funding in 2024 grew by 28%, reaching approximately $13.7 billion. Despite significant progress compared to 2023, this growth has not returned to previous peaks, even though market sentiment this year is very bullish.
Looking ahead to 2025, top crypto venture capitals maintain a cautiously optimistic outlook. While most believe funding levels are unlikely to return to the highs of 2021-2022, there is a clear consensus that startups with strong product-market fit and visible user adoption are most likely to attract capital in the coming year.
Here are the 2025 funding outlooks from leaders at companies like Dragonfly, Pantera, Mult1C0in, Coinbase Ventures, BN Labs, and Galaxy Ventures shared with The Block.
Dragonfly: betting on fields like DeFi, CeFi, and stablecoins
Rob Hadick, a general partner at Dragonfly, told The Block in an interview that he expects significant growth in crypto venture capital funding in 2025, driven by a more relaxed regulatory environment in the U.S., possibly continued token price increases, and increased institutional capital. However, Hadick believes the level of funding will not return to the highs of 2021-2022 for a 'long time,' reflecting a cautious attitude from venture capital about repeating past mistakes.
Dragonfly will continue to focus on supporting founders who excel in areas with validated product-market fit, including decentralized finance (DeFi), scaling platforms, centralized finance (CeFi), and stablecoins/payments. Although emerging fields like crypto AI and decentralized physical infrastructure networks (DePIN) are also on the radar, Hadick believes these are still in an 'experimental' phase.
Conversely, Hadick stated that as the focus shifts to emerging industries, investments in categories such as security, tokenization, and interoperability may decline. He also predicts challenges for decentralized social media due to a lack of scalability and product-market fit.
Pantera: optimistic about crypto - AI, DePIN, and new Layer 1 blockchains
Lauren Stephanian, a general partner at Pantera Capital, told The Block in an interview that due to investors' willingness to deploy capital with a U.S. government that supports crypto, crypto venture capital funding is expected to grow in 2025.
However, Stephanian mentioned, 'The bull market won't last forever,' so it remains to be seen 'when investment deployment will begin to slow down in the coming year.'
Pantera will continue to invest broadly in the crypto and blockchain space, with a particular focus on crypto-AI, decentralized physical infrastructure networks (DePIN), and new Layer 1 blockchains that support more application layer functionalities.
Mult1C0in: continues to be optimistic about the Solana ecosystem
Mult1C0in Capital is currently focused on expanding its investments in decentralized finance (DeFi) applications, particularly within the Solana ecosystem. This year, Solana's on-chain key metrics have outperformed Ethereum and its Layer 2 ecosystem. 'We expect this trend to continue, as applications and protocols on Solana will become big winners in the next cycle as more users, capital, issuance, and activity migrate to Solana's ecosystem,' Kyle Samani, co-founder and managing partner of Mult1C0in Capital, told The Block.
Samani believes Ethereum will continue to face difficulties and may even fall into a prolonged decline as it faces fierce competition from Solana and other faster, cheaper blockchains. 'Unless Ethereum can catch up, developers, users, and capital will migrate to other chains that better meet their needs,' he added.
Additionally, Mult1C0in is optimistic about stablecoins. Samani described stablecoins as 'one of the greatest technological and financial innovations of our lifetime.'
'Stablecoins have the opportunity to become an undeniable force in 2025,' Samani said. 'The world wants dollars, and stablecoins are the most efficient way to obtain dollars. Their design space is vast, and we are still in a relatively early stage on the adoption curve.'
Coinbase Ventures: focusing on the on-chain economy
Hoolie Tejwani, head of Coinbase Ventures, told The Block in an interview that the firm expects to be 'very active' in 2025 and beyond, capable of seizing market opportunities. The company is optimistic about regulatory progress in the U.S., especially due to the pro-crypto Donald Trump administration and a pro-crypto Congress taking office in January 2025.
Tejwani stated that Coinbase Ventures will continue to invest broadly around the on-chain economy, guided by 'where the best and brightest builders are spending the most time and energy.' The company is optimistic about the application layer, believing that as infrastructure matures, applications with internet-scale potential are finally becoming possible. Areas of focus include stablecoin payments and finance, the intersection of crypto and AI, on-chain consumer applications (like social, gaming, and creator apps), and DeFi innovations.
At the same time, Coinbase Ventures has not completely abandoned investments in the infrastructure layer, as there are still unresolved challenges and new opportunities in the tools space, Tejwani added.
BN Labs: prioritizing fundamentals and user adoption
As BN's venture capital and incubation arm valued at $10 billion, BN Labs is a 'evergreen' investor. Regardless of market cycles, the company will continue to support Web3, AI, and biotech startups, as its investment director Alex Odagiu told The Block.
BN Labs expects that crypto venture capital funding will maintain strong momentum in 2025 but will remain 'focused on fundamentals' rather than price fluctuations or market hype. Odagiu emphasized that projects with real-world use cases, product-market fit, strong teams, and sustainable revenue models are most likely to succeed.
Galaxy Ventures: optimistic about stablecoins and tokenization
Galaxy Ventures is optimistic about the growth potential of stablecoins and tokenization in 2025. The company's partner Will Nuelle told The Block that stablecoins, especially in the payments sector, demonstrate a strong product-market fit and remain a key area for capital deployment.
Although the adoption of tokenization lags behind stablecoins, Nuelle believes it holds significant potential for investors. Galaxy Ventures plans to further explore these opportunities. However, Nuelle has a rather pessimistic view of metaverse-related projects, expecting that funding in this area will lag in 2025 due to a lack of clear adoption signs.
Hashed: cautiously optimistic about 2025
Simon Seojoon Kim, CEO and managing partner of Hashed, holds a cautiously optimistic view for 2025. He stated that while Trump's remarks about treating Bitcoin as a U.S. treasury asset suggest a potential shift in institutional sentiment, funding levels are unlikely to return to the peaks of 2021-2022. Kim added that if a macro or political 'black swan' event occurs, this situation could change significantly.
Kim pointed out that key drivers for 2025 may include clarity in the U.S. regulatory framework, increased institutional activity in Asian markets, and advancements in infrastructure supporting real-world applications. However, he also warned that regulatory setbacks, macroeconomic uncertainty, and geopolitical tensions could dampen growth.
Hashed's investment priorities for 2025 include data infrastructure, institutional-grade DeFi applications, regulated stablecoin payment systems, and crypto and AI infrastructure. Kim believes these areas have clear product-market fit, compliance pathways, and reliable revenue potential. In contrast, he expects funding for GameFi projects lacking sustainable economic models, undifferentiated Layer 1 and Layer 2 protocols, consumer-grade DeFi applications in restricted regions, and NFT platforms without clear utility or revenue models to decline.
Hashed plans to complete fundraising for its third venture fund in the first quarter of 2025 and launch a new investment tool in Abu Dhabi to facilitate direct token investments under the regional regulatory framework. He stated that this strategic expansion aims to address the inability of existing Korean domestic funds to conduct direct token investments due to local regulatory restrictions, but did not disclose the target fund size.
HackVC: betting on crypto and AI, infrastructure, and DeFi
Ed Roman, co-founder and managing partner of Hack VC, told The Block that unless a black swan event occurs, crypto venture capital funding is expected to 'grow substantially' in 2025. Roman attributes this to pro-crypto government policies and renewed enthusiasm among Web3 entrepreneurs.
HackVC focuses primarily on three areas: crypto and AI, infrastructure, and DeFi. Roman mentioned that the decentralized physical infrastructure networks (DePINs) based on GPUs offer unique opportunities in the multi-layer AI stack compared to traditional Web2 cloud. 'This is a trillion-dollar market serving Web2 clients,' he said.
In terms of infrastructure, Hack VC is optimistic about scalability protocols, modular infrastructure, Web3 security, maximum extractable value (MEV) improvements, and account abstraction technology. These innovations significantly enhance the Web3 tech stack and improve the user experience of decentralized applications (dApps).
In the DeFi space, HackVC sees this as a 'once-in-a-generation opportunity to streamline the financial system.' Roman views stablecoin-based payments as the foundation of this system, with broad real-world application potential, representing 'a trillion-dollar market.' However, he is less optimistic about NFTs, predicting that most NFTs will depreciate, with only top-tier assets maintaining their value.
Portal Ventures: supporting integrated platforms
Evan Fisher, founder and managing partner of Portal Ventures, anticipates that the 'animal spirits' of the market will return in 2025, but funding levels will not return to the highs of 2021-2022, as the macroeconomic environment of those two years was unique.
Fisher told The Block that Portal Ventures is optimistic about platforms that provide both infrastructure and applications, as these platforms can control user experience and build practical scenarios. However, he predicts that investment in heavier infrastructure projects (like zero-knowledge development platforms and middleware) will slow down due to a lack of customers and sustainable business models.
BlockchainCapital: focusing on multiple areas, including stablecoin infrastructure and DeFi
Kinjal Shah, a partner at Blockchain Capital, expects that with the market's continued strength, funding levels will rise in 2025. However, she believes that funding sizes will not return to the highs of 2021-2022, as the excitement at that time was influenced by broader macroeconomic trends.
Blockchain Capital will continue to pursue opportunistic investments, focusing on stablecoin infrastructure, innovative distribution models, and DeFi platforms that connect institutions and retail users.
