Original author: Yogita Khatri
Original translation: Shenchao TechFlow
Quick overview
In 2024, venture capital funding in the crypto space increased by 28% year-on-year, reaching $13.7 billion, but still fell short of historical peaks.
Top crypto venture capital firms believe that funding in 2025 will mainly flow to startups that demonstrate strong product-market fit.
According to financing data from The Block Pro, crypto venture capital funding in 2024 saw significant growth, increasing by 28% year-on-year to approximately $13.7 billion. Although this achievement reflects an improvement compared to 2023, overall market sentiment this year remains optimistic but has not yet recovered to previous historical highs.
Looking ahead to 2025, top crypto venture capital firms hold a cautious yet optimistic view of the future. While most believe that funding levels are unlikely to return to the highs of 2021-2022, there is a consensus in the industry that startups demonstrating strong product-market fit and possessing a real user base will find it easier to attract capital.
Here are the specific views of leaders from institutions such as Dragonfly, Pantera, Multicoin, Coinbase Ventures, Binance Labs, and Galaxy Ventures on the funding prospects for 2025.
Dragonfly: Betting on areas such as DeFi, CeFi, and stablecoins
Rob Hadick, general partner at Dragonfly, stated that due to the gradual easing of the U.S. regulatory environment, the potential for continued price increases of tokens, and accelerated inflows of institutional capital, crypto venture capital funding in 2025 is expected to achieve significant growth. However, he also pointed out that funding levels are unlikely to return to the peaks of 2021-2022 in the short term, reflecting venture capital firms' cautious attitude towards avoiding past mistakes.
Dragonfly is currently focused on supporting outstanding founders who demonstrate clear product-market fit in decentralized finance (DeFi), scaling platforms, centralized finance (CeFi), and stablecoins/payments. While emerging fields such as crypto AI and decentralized physical infrastructure networks (DePINs) are also within the scope of attention, Hadick stated that these areas are still in the experimental phase.
In contrast, investments in traditional areas such as security, tokenization, and interoperability may decrease, as the market's attention gradually shifts to newer directions. He also predicts that decentralized social media will face significant challenges due to its lack of scalability and product-market fit.
Pantera: Optimistic about crypto AI, DePINs, and new Layer 1s
Lauren Stephanian, general partner at Pantera Capital, stated that as investor confidence in pro-crypto policies in the U.S. increases, crypto venture capital funding is expected to grow further in 2025.
However, she also reminds us that "bull markets do not last forever," so it remains to be seen "when we will start to see a slowdown in capital deployment next year."
Pantera is currently continuing extensive investments in the crypto and blockchain space, but is particularly optimistic about crypto AI, DePINs, and new Layer 1s that support more application-level functionalities.
Multicoin: Continue to be optimistic about the Solana ecosystem
Multicoin Capital is increasing its layout for DeFi applications, particularly in the Solana ecosystem. According to Kyle Samani, co-founder and managing partner of Multicoin Capital, Solana has outperformed Ethereum and Layer 2 ecosystems in key on-chain metrics this year. "We expect this trend to continue, with applications and protocols in the Solana ecosystem standing out in the next cycle as more users, capital, project launches, and activities migrate to Solana."
Samani also noted that Ethereum may continue to face challenges, "and may even fall into a long-term decline," as it faces fierce competition from Solana and other faster, cheaper blockchains. "Unless Ethereum can enhance its competitiveness, developers, users, and capital will turn to other chains that better meet their needs."
Additionally, Multicoin has great confidence in stablecoins. Samani described stablecoins as "one of the most important technological and financial innovations of our generation."
"Stablecoins are expected to become an undeniable force in 2025," Samani stated. "There is a strong demand for the dollar worldwide, and stablecoins are the most effective way to obtain dollars. The design space in this area is very broad, and we are still in a relatively early stage of its adoption curve."
Coinbase Ventures: Focus on the on-chain economy, layout the application layer
Hoolie Tejwani, head of Coinbase Ventures, stated in an interview with The Block that the company expects to remain "highly active" in 2025 and beyond and is already prepared to seize market opportunities. Tejwani expressed optimism about potential positive regulatory developments following the arrival of a pro-crypto Trump administration and a supportive Congress in the U.S. in January 2025.
Tejwani revealed that Coinbase Ventures will continue to invest widely in the on-chain economy, focusing on "where the best developers are putting their efforts at night and on weekends." He is particularly optimistic about the application layer, as the maturation of infrastructure makes internet-scale applications feasible. Areas of focus include stablecoin payments and finance, cross-applications of crypto AI, on-chain consumer applications (such as social, gaming, and creator tools), and innovations in DeFi.
Meanwhile, Tejwani emphasized that Coinbase Ventures has not completely abandoned the infrastructure layer, as there are still unresolved technical challenges and potential innovation opportunities in the tooling space.
Binance Labs: Focusing on fundamentals and user adoption
Binance Labs is Binance's $10 billion venture capital and incubation division, and its investment director Alex Odagiu stated that regardless of market cycles, the company always acts as a "evergreen" investor, continually supporting startups in the web3, AI, and biotechnology sectors.
Odagiu expects crypto venture capital to maintain strong momentum in 2025, but emphasizes that Binance Labs will "focus on fundamentals," rather than chasing price fluctuations or market speculation. He pointed out that projects with real application scenarios, product-market fit, strong teams, and sustainable revenue models will be the most competitive.
Galaxy Ventures: Optimistic about the future of stablecoins and tokenization
Will Nuelle, general partner at Galaxy Ventures, stated that stablecoins, especially in the payments sector, continue to demonstrate strong product-market fit and are a core focus of the company's capital deployment. He believes that although the adoption speed of tokenization is currently lagging behind that of stablecoins, the investment potential in this area is enormous and worth further exploration.
Although tokenization still lags behind the adoption of stablecoins, Nuelle sees enormous potential for investors. Galaxy Ventures plans to further explore these opportunities. However, Nuelle is less optimistic about projects related to the metaverse, predicting that funding will lag in 2025 due to a lack of clear signs of adoption.
Hashed: Prudent layout, expanding global investments
Simon Seojoon Kim, CEO and managing partner of Hashed, holds a cautiously optimistic view of the market outlook for 2025. He mentioned that Trump's comments regarding Bitcoin possibly becoming a Treasury asset may hint at a potential shift in institutional sentiment. However, he believes that funding levels are unlikely to return to the peaks of 2021-2022 in the short term unless there are "black swan" events in the macroeconomic or geopolitical realms.
Kim believes that the market development in 2025 will be influenced by the following factors: further clarification of the U.S. regulatory environment, growth in institutional activity in Asian markets, and advancements in infrastructure driving real-world applications. However, he also warns that regulatory uncertainty, macroeconomic pressures, and geopolitical tensions may inhibit market growth.
Hashed's investment focus will be on data infrastructure, institutional-level DeFi applications, regulated stablecoin payment systems, and crypto AI infrastructure, which are considered to have clear product-market fit and mature business models. In contrast, he expects that speculative GameFi projects, undifferentiated Layer 1 and Layer 2 protocols, and NFT platforms lacking actual revenue models will face reduced funding.
Hashed plans to complete the fundraising for its third venture capital fund in the first quarter of 2025 and plans to launch a new investment tool in Abu Dhabi to facilitate direct token investments according to local regulatory frameworks. Kim stated that this move aims to compensate for the limitations of Korean registered funds in direct token investment capabilities.
Hack VC: Betting on crypto AI, infrastructure, and DeFi
Ed Roman, co-founder and managing partner of Hack VC, expressed an optimistic outlook for crypto venture capital in 2025, expecting significant market growth provided that no unforeseen "black swan" events occur. He noted that a pro-crypto policy environment and a resurgence of enthusiasm in web3 entrepreneurship will be key drivers of this growth.
Hack VC's investment focus is concentrated on three main areas: crypto AI, infrastructure, and DeFi. Roman explained that compared to traditional web2 cloud services, decentralized physical infrastructure networks (DePINs) provide a low-cost way to build multi-layer AI technology stacks, with the potential market size in the crypto space serving web2 clients possibly reaching trillions of dollars.
In terms of infrastructure, Hack VC is optimistic about the development of scalability protocols, modular infrastructure, web3 security, maximum extractable value (MEV) improvements, and account abstraction technology. The maturation of these technologies has significantly improved the user experience of decentralized applications.
In the DeFi sector, Hack VC believes that the current moment is a "once-in-a-century opportunity" to reshape the financial system. Roman is particularly optimistic about stablecoin-based payments, believing that their widespread practical application could create a "trillion-dollar market." However, the company is less optimistic about the prospects for NFTs, predicting that most NFTs will lose value, with only a few blue-chip assets able to retain their worth.
Portal Ventures: Supporting platforms that combine infrastructure and applications
Evan Fisher, founder and general partner of Portal Ventures, stated that he expects market sentiment to improve in 2025, but funding levels may struggle to return to the peaks of 2021-2022, as the macroeconomic environment during those years was unique.
Fisher stated in an interview with The Block that Portal Ventures is optimistic about platforms that can provide both infrastructure and applications. Such platforms not only allow projects to better control user experience but also drive the realization of practical use cases. However, he also noted that investments in heavier infrastructure projects may slow down, such as zero-knowledge development platforms and middleware, mainly due to the current lack of a sufficient customer base and sustainable business models for these projects.
Blockchain Capital: Focusing on stablecoin infrastructure and DeFi
Kinjal Shah, general partner at Blockchain Capital, expects funding levels to increase in 2025 as market performance continues to improve. However, she believes that the peak funding levels of 2021-2022 are unlikely to be replicated, as growth during that time was largely driven by macroeconomic trends.
Shah stated that Blockchain Capital will continue to maintain a flexible investment strategy, focusing on several key areas, including stablecoin infrastructure, innovative distribution models, and DeFi platforms capable of connecting institutions with retail investors.