Today, we are witnessing the arrival of the future.
Article written by Yogita Khatri
Source: TheBlock
In recent days, with Trump's victory and Bitcoin breaking through $99,000, there has been a frenzy in the crypto space. Back in 2018, when I first started writing about crypto, the price of Bitcoin was just around $3,000. Now, we are witnessing the arrival of the future.
I spoke with 12 crypto venture capitalists. Despite the palpable excitement surrounding Trump’s victory and Bitcoin’s surge, most investors are sticking with their long-term plans. However, some are adjusting their strategies to pay more attention to the latest trends and changes in the political and market environment.
“The excitement in the industry is justified,” said Lasse Clausen, founding partner of 1kx. “Only those in the industry can truly understand the scale of the disruption to innovation caused by past governments. As a result, outsiders still underestimate how many exciting products the industry will create once founders are given the freedom to experiment again.”
Arianna Simpson, general partner at a16z crypto, echoed similar sentiments, noting that the past few years have been challenging for the crypto industry. But she expects a “significant shift in policy” that will greatly benefit Web3 builders and companies.
New opportunities brought by the clarification of crypto regulation
With the Trump administration expected to bring clarity to crypto regulation, investors predict that more founders will start investing in Web3. This week, Portal Ventures closed its second fund, $75 million, focused on investing in seed rounds of crypto startups. Founder Evan Fisher said he expects some veteran founders who have sold businesses and have hundreds of millions of dollars to invest in crypto, who were hesitant due to previous legal and regulatory risks, to gradually enter the field after the regulatory environment reduces risks. "We'll see more and more top founders entering the crypto space," Fisher said.
CoinFund founder and CEO Jake Brukhman said the company is preparing for a “super cycle” in the crypto market. CoinFund is well-funded across its seed, venture and liquidity investment programs and has added six new team members in the past two to three months.
Investment focus: encryption, AI, DeFi and other fields
Looking ahead, crypto venture capital is turning its attention to areas with high potential, including crypto and AI, DeFi, tokenization of real-world assets (RWA), infrastructure, stablecoins, payments, etc.
Many investors believe that the intersection of crypto and artificial intelligence will be the next transformative trend. Ed Roman, co-founder of Hack VC, describes crypto and AI as the most attractive and promising category in the crypto field at present, and envisions a multi-layered Web3 AI stack that leverages the cost efficiency of decentralized computing networks. "This is a trillion-dollar market serving Web2 customers," Roman said. "AI is not a fad like NFT, but creates real business value and may be the most important technological innovation since mobile phones and the Internet."
However, Roman noted that the health of crypto and AI is largely dependent on the health of the Web2 AI category, whose performance is influenced by NVIDIA. Therefore, Hack VC is keeping a close eye on NVIDIA as a "loose proxy" for crypto and AI.
Balder Bomans, chief investment officer at Maven 11 Capital, is also bullish on the development of crypto and AI startups, especially the AI-driven DePIN protocol, which provides computing resources for AI model training. CoinFund’s Brukhman added that most retail investors will want to get in touch with the AI field through the crypto market next year, and predicted that “the summer of 2025 will be the summer of decentralized AI (deAI)”.
DeFi’s Resurgence
DeFi is seeing renewed attention as institutional adoption grows. Hack VC’s Roman noted that DeFi has taken a hit recently due to high interest rates, which made U.S. Treasuries more attractive, but Trump’s expected rate cuts could make DeFi competitive again. Roman sees DeFi as a “generational opportunity to integrate finance.”
Clausen stressed that traditional financial institutions may begin to put real-world assets on-chain and use DeFi infrastructure on a large scale. "Imagine how inefficient trading, clearing, and settlement are in traditional finance, while in a decentralized exchange (DEX), all three can be completed in a single instant transaction without any counterparty risk, while also publicly verifying that the exchange operator is not fraudulent," Clausen said. "It's like fishing with dynamite, no suspense."
Erick Zhang, managing partner at Nomad Capital and former Binance executive, also sees growth potential in DeFi, especially amid renewed altcoin activity and ongoing challenges for centralized exchanges. Will Nuelle, general partner at Galaxy Ventures, and Thomas Klocanas, general partner and head of venture capital at BlockTower Capital, also predict expansion of DeFi, RWA tokenization, stablecoins, and payment categories.
“After Trump took office, it became clear that one of the biggest barriers to stablecoin adoption in payments — banking relationships that interface with the fiat currency system — had become easier,” Nuelle said. “We hope/expect that banks offering legitimate crypto services will not fear retaliation from the FDIC or other agencies, which should ease banks’ ability to integrate with what is clearly a growing use case.”
More categories to watch in the future
Consumer applications and infrastructure categories are also gaining traction. “I’m particularly excited about consumer applications of crypto, as this category has been particularly adversely impacted under the policies of the previous administration,” said Simpson of a16z crypto, who also expressed continued interest in the development of DePIN and infrastructure projects.
Alvaro Gracia, partner at Borderless Capital, also highlighted the growth potential of the DeFi and DePIN sectors, especially as Bitcoin dominance gradually shifts to altcoins. Gracia said that his $100 million DePIN fund still has about $70 million to deploy, which he plans to invest in the next two to three years.
1kx’s Clausen added that key categories his company is looking at are infrastructure, middleware and consumer applications, particularly those that require bank integration, which have been hampered in the past due to regulatory restrictions.
Adam Winnick, general managing partner of Finality Capital Partners, expressed optimism about the infrastructure sector, specifically highlighting heavy staking and zero-knowledge technology startups as key areas of focus. Miko Matsumura, managing partner of Gumi Cryptos Capital, said he focuses on infrastructure and scaling projects that solve “ordinary problems” for ordinary people, rather than projects that only solve crypto problems for crypto users.
Still, not all investors are excited about infrastructure. Maven 11’s Bomans said the firm has shifted its focus to application layer investments over the past 12 months as the rise of powerful monolithic chains and continued improvements in modular stacks have cleared most scaling bottlenecks.
Portal Ventures’ Fisher said his firm has little interest in infrastructure projects, preferring commercial startups with clear distribution advantages and strong user demand.
Nomad Capital’s Zhang similarly mentioned that his firm has taken a more cautious approach to deploying infrastructure projects, especially Layer 1 and Layer 2 networks. He believes that “most infrastructure projects are essentially ‘infrastructure hype’, and their success often depends on the founding team’s ability to manage narrative and brand, but the number of teams that can stand out in this unique dynamic is limited.”
Potential risks of a Trump administration
While Trump’s election has brought new optimism to the crypto space, some venture capitalists have warned of potential risks that could affect the trajectory of the industry.
1kx’s Clausen raised concerns about Trump’s immigration policies, arguing that reduced labor supply could lead to higher wage stickiness, which would be bearish for risk assets like crypto.
Galaxy Ventures’ Nuelle noted that if “Trump is too hands-off on crypto,” there could be a repeat of the FTX incident. He believes that balanced bipartisan legislation and a clear status for digital assets will create the most stable long-term value.
Nomad Capital’s Zhang stressed that the “Trump effect” could lose steam if bold proposals such as Bitcoin becoming a U.S. strategic reserve asset fail to materialize quickly. He said unfulfilled expectations could dampen market enthusiasm.
Hack VC's Roman also mentioned a key question: Will the United States actively hoard new Bitcoin, or just hold existing confiscated Bitcoin? He said that no matter what the outcome, it would be a positive for the crypto space. But if the United States actively builds up its Bitcoin reserves, this could become a new standard for other countries' policies, which could have a more far-reaching impact on the crypto industry.
