Written by: Zen, PANews
As the New Year approaches, the crypto industry welcomes a new development node. In the past year of 2024, the market experienced recovery, innovation, and adjustment, with leading projects continuously solidifying their positions while emerging sectors quietly rise, laying the foundation for the future. Amid the ups and downs of this year, VCs serve as barometers of industry development, witnessing market changes and shaping the industry's direction at the intersection of capital, community, and technology.
Standing at the starting point of 2025, PANews invited over a dozen top VCs to share their observations and thoughts on the crypto industry. They reflected on the highlights of the past year, analyzed current market opportunities and challenges, and made predictions about future development trends. In this rapidly changing field, which projects and sectors are becoming focal points for VCs? Let us step into the perspectives of VCs and explore the 'yesterday, today, and tomorrow' of the crypto industry.
The most impressive projects of 2024
In the past year, the crypto industry has welcomed a new growth wave driven by the dual forces of market recovery and technological innovation. From infrastructure upgrades to breakthroughs in emerging sectors, countless projects have emerged this year, showcasing strong vitality and innovative potential. Some projects, leveraging unique technical paths or business models, not only attracted significant attention but also left a profound impact both inside and outside the industry.
DFG (Digital Finance Group) founder and CEO James Wo pointed out that Hyperliquid started as a high-performance perpetual decentralized exchange (perp DEX), attracting a large number of users while maintaining trading execution speed and liquidity. Additionally, Hyperliquid's tokens were not listed on any VC or centralized exchanges (CEX), becoming one of the most successful airdrops in crypto history. 'The platform is expanding its product offerings and launching its own HyperEVM ecosystem, which includes many native decentralized applications (dApps) to enhance the practicality of its spot ecosystem. The platform earns significant fees through on-chain clearing and market-making, gradually encroaching on the market share of leading DEXs and CEXs.'
Web3Port co-founder Chris also praised Hyperliquid, impressed by its market share, community airdrop, and distribution mechanism, as well as its wealth effect. He also mentioned Pump.fun—the most successful meme coin launch platform this year. Compared to existing platforms in the market, Pump.fun successfully elevated the concept of a 'meme launch platform' to a top narrative, igniting a wave in the meme market. Chris stated that the insight from Pump.fun is that Web3 projects can achieve success by building truly practical products with high user experience and market fit.
Wallfacer Labs (vaults.fyi) CEO and co-founder Ryan Rodenbaugh noted the revival of mature lending protocols in DeFi such as AAVE and Compound, as well as the emergence of high-quality newcomers like Morpho, Euler, and Ajna is exciting. Although DeFi has not garnered as much attention in the current cycle as in the past, the understated success of these protocols remains worthy of attention and tracking.
Among the answers provided by various VCs, Pudgy Penguin is one of the most frequently mentioned projects. Jsquare Group founder and CEO Joanna praised Pudgy Penguin, believing it has single-handedly driven the revival of the entire NFT sector. 'As an early investor and Pudgy NFT holder, I have felt the powerful energy emanating from Luca as a representative of the new generation of entrepreneurs with a Web2 + Web3 integration mindset, which reinforces one of my fundamental principles: Invest in the next generation.'
'Ethena has performed impressively in the DeFi space with its USDE stablecoin, profiting from establishing 1x long and 1x short positions on centralized exchanges (CEX) through high funding rates.' Jsquare partner Dinghan stated that Ethena's collaboration with the BlackRock BUIDL fund ensures that even in cases of negative funding rates, USDE can maintain stable returns, further consolidating its long-term viability.
How will Bitcoin's market performance unfold?
Bitcoin exhibited astonishing growth momentum in 2024. According to CoinGecko data, as of December 31, 2024, Bitcoin's price had risen by a total of 119.1%. This surge was mainly driven by institutional adoption of spot ETFs, the halving event in April, and market optimism following the U.S. elections. Looking ahead to 2025, Web3Port co-founder Chris believes the Bitcoin bull market is likely to continue, with a breakthrough of $200,000 next year being a high-probability event. He noted that as the market matures, the supply-demand relationship of Bitcoin will further strengthen, and Bitcoin prices below $50,000 may become a thing of the past in future bull and bear cycles.
Regarding the upper limit Bitcoin might reach next year, Ryze Labs research analyst Allen holds a similar view, mainly judging peaks through technical indicators such as the Pi Cycle and 2Y MA Multiplier. He stated that historically, the resonance of these two indicators occurred on December 5, 2013, December 16, 2017, and the most recent appearance of the Pi Cycle top signal on April 12, 2021. According to historical data, these indicators hold significant reference value. Allen pointed out that according to the estimates of the 2Y MA Multiplier, Bitcoin's top could be around $200,000. Both signals have ready indicators on TradingView that can be set for alerts, making them convenient for peak judgments and reduction decisions.
'If we take a cautious perspective on predictions, I believe Bitcoin's next peak could reach between $120,000 and $150,000, after which it may oscillate between $100,000 and $150,000.' Waterdrip Capital investment manager Evan Lu stated that based on Trump’s remarks about establishing Bitcoin as a strategic reserve, assuming gold's market value remains unchanged, as long as Bitcoin's market value fails to surpass that of gold, Bitcoin can be considered a growth asset, with its price potentially touching $600,000, though this process may take 5 to 10 years.
Evan said that during the last halving cycle (i.e., May 2020), Bitcoin experienced a slow rise, reaching its first peak in April 2021, climbing from about $9,000 to $65,000. During the period from April to July, due to the influence of the '519 incident,' Bitcoin's price saw a significant pullback. However, the market later welcomed a second wave of increases, ultimately reaching the peak of the previous cycle. If the price at the current halving day serves as a benchmark, it may mark the beginning of a new upward trend. Bitcoin could experience a slight decline or sideways consolidation from the end of 2024 to the first quarter of 2025, followed by a second wave of increases, with prices potentially reaching $120,000 to $150,000.
'Unlike in the past, the current market dynamics will be profoundly influenced by multiple factors, the most critical of which include the external liquidity brought by Bitcoin spot ETFs and the ongoing capital inflow driven by future Bitcoin reserve policies.' Evan believes this means that from now until the peak next year, the Bitcoin market may not experience significant pullbacks but rather maintain an upward trending oscillation, gradually moving towards higher price levels.
In the discussion about Bitcoin, Web3.com Ventures investment director Nemo quoted MicroStrategy co-founder Michael Saylor: 'Spend 1,000 hours studying, and you'll become a Bitcoin extremist. You'll realize that this is not just a technology but a matter of moral justice. Bitcoin has brought freedom, economic, and property rights to 8 billion people, while also providing 4 million companies worldwide with the opportunity to invest in non-toxic assets.'
Will the dispute between meme coins and 'VC coins' continue, and what solutions exist to resolve the dilemmas?
The series of controversies surrounding 'VC coins' has been a significant topic that could not be ignored over the past year. Generative Ventures partner Will Wang proposed a novel perspective on this, stating that once the scale of primary market VC funds exceeds $30-50 million, it becomes difficult to achieve excess returns for LPs. Will Wang believes that only funds of a sufficiently small scale can force VCs to delve into early stages, genuinely supporting those entrepreneurs in need of help, thus nurturing true 'myths.' In contrast, large-scale VC funds often fall into the trap of managing expanded scales, engaging in later rounds and launching market-criticized 'VC coins.' This practice is actually an old problem of Web2 VCs, and in recent years, Web3 VCs have not been spared either.
'I believe this situation will gradually be corrected. Whether in technology or financial innovation, there will always be phases of non-consensus, and that is precisely when VCs should act. The market will ultimately reward those who dare to act during periods of non-consensus,' Will Wang added.
What is the essence of the dispute between meme coins and VC coins? Web3Port co-founder Chris pointed out that it ultimately boils down to competition between the market's existing capital and liquidity. In an environment with limited new funds, VC coins, due to their low circulation and high FDV characteristics, along with the constant emergence of new VC coin projects, make it difficult for market funds to sustain, significantly reducing retail investors' willingness to take on these coins. The advantage of meme coins lies in their full circulation and fair distribution mechanisms, aligning with the psychology of market investors, becoming a 'new weapon' for retail investors to counter the advantages of institutions.
However, the PVP (player versus player) nature of meme coins is inherently unsustainable because, aside from a few top meme projects, most meme coins struggle to provide long-term value support. Chris stated that from the overall landscape of the crypto market, aside from BTC and ETH, and a very few DeFi infrastructure projects with stable revenue sources, most other projects' tokens are PVP, where market participants compete against each other, leading to simultaneous gains and losses. Regarding the current dilemmas of VC coins, he believes there is no good solution in the short term. In a backdrop of tight market liquidity and the increasing advantages of institutional investment, the resolution of VC coin issues requires going through a complete bull and bear cycle, allowing the market to naturally clear and rebuild trust and fairness.
'Issuing tokens is not the end but the true starting point of project operation.' Waterdrip Capital investment manager Evan Lu believes that project parties cannot operate with the mindset of 'financing equals profit and issuing tokens equals cashing out.' Instead, they need to seriously consider whether there are truly applicable scenarios for the project, whether it can achieve more stable cash flow income, and whether it can maintain active users and a genuine community after issuing tokens.
IOSG Ventures lead Jiawei candidly stated that 'VC coin projects' need to better consider Token Market Fit, questioning whether there is a necessity for the token's launch, its purpose, and what kind of tokens the broader community will support, encouraging broader community participation to diversify chips and strengthen interest binding.
Which ecosystems, sectors, or projects might shine and become the industry's future stars?
As the crypto market rises, new waves of innovation narratives such as AI and DeSci are driving the industry toward a new stage of development. After undergoing the baptism of market cycles, leading ecosystems continue to solidify their moats, while emerging sectors and projects are quietly rising, accumulating strength for future explosions. Looking forward to the coming year, which ecosystems, sectors, and projects are likely to stand out and become the 'tomorrow's stars' leading the industry? Numerous institutions have provided unique insights.
Generative Ventures partner Will Wang believes that many people do not fully understand the essence of RWA (Real World Asset). 'We believe RWA is fundamentally about one thing: enabling blockchain to account for mainstream global financial assets.' He noted that the current penetration of this 'on-chain accounting' is still less than 0.1%. Even a one-order-of-magnitude increase in penetration could spawn multiple secondary assets similar to ONDO and USUAL.
IOSG Ventures lead Jiawei stated that re-staking will be a major narrative in 2024 that has not yet been reflected in coin prices. With the gradual launch of AVS, it may reach a climax in 2025. Additionally, ZK system projects (RiscZero, hardware-accelerated Ingonyama, etc.) will gradually showcase their market potential.
'AI Agents are expected to become the tomorrow's stars in the crypto industry.' Ryze Labs research analyst Allen said that AI Agents have the ability to process vast amounts of market data and can make real-time accurate trading decisions, with reaction speeds far exceeding those of traditional human traders. In the DeFi space, AI Agents can optimize lending rates and liquidity pool pricing mechanisms, significantly improving the efficiency of capital utilization. Additionally, they open up new possibilities for the intelligent management of crypto assets, redefining the boundaries of asset management.
In this topic, the PayFi sector has been frequently mentioned by multiple institutions, undoubtedly becoming a focal point of market attention. With the proliferation of cryptocurrencies, ecosystems capable of achieving seamless, low-cost payments are entering a phase of rapid development. Jsquare partner Dinghan predicts that projects that bridge traditional finance and cryptocurrencies (such as Layer 2 solutions and stablecoin issuers) will receive widespread attention in the future. Those payment protocols that can deeply integrate with mainstream services and facilitate convenient crypto and fiat conversions will become key drivers of cryptocurrency's integration into daily life.
The integration of AI and blockchain is also seen as an important development direction for the future. Dinghan stated that with the rapid rise of decentralized AI infrastructure and AI agents, this field is entering a new growth cycle. Projects aimed at building decentralized AI networks or AI-driven applications are gearing up and are expected to become new highlights in the industry. 'Blockchain provides a trustworthy foundational layer for AI interactions and transactions, enhancing data transparency and security, and opening new possibilities for the widespread implementation of autonomous AI applications, further accelerating innovation in this field.'
Is the long-discussed 'mass adoption' likely to break through? Who will lift the holy grail?
'In various sectors of the industry, we have already seen some 'mass adoption.' DFG (Digital Finance Group) founder and CEO James Wo stated that vertical fields like DePIN are attracting Web2 users and providing value to their ecosystems through additional resources. 'For example, Helium connects existing Web2 telecom giants through 5G networks, while Render provides GPUs at low cost, supporting gaming, rendering, and AI fields.' James believes the next area to drive larger-scale adoption may be the payments sector. Infrastructure that can provide efficient crypto payment and fiat conversion solutions for physical stores will drive a new wave of user influx, and as retail investors begin to invest in and hold crypto assets, this trend will further accelerate.
YBB Capital investment research manager Zeke believes that, based on recent industry discussions, the payments sector is likely to become the first track for blockchain 'mass adoption.' Stablecoins have demonstrated the ability to exceed traditional banking efficiency in non-dollar countries and offer various utilities for residents of third-world countries, including protection against local currency inflation, virtual service subscriptions, and financial investments. Once a compliance framework is established, the potential of this sector could equal the trillion-dollar traditional payments system of Web2. The immense demand will also spawn a variety of startups, from upstream stablecoin issuers to downstream payment services, leading to a true blossoming of innovation. The first large-scale application era of blockchain is likely to begin here.
Jsquare Group founder and CEO Joanna expressed optimism about the progress of 'mass adoption' in the coming year. She stated that mass adoption is about bringing in money (institutions / retail) and bringing in user headcounts (mainly retail). Traditional institutions are more likely to enter the market driven by policy factors, while on the retail side, from the perspective of ecosystem positioning and sector selection, the Solana ecosystem has a distinct competitive advantage. At the same time, Joanna has high hopes for Pudgy Penguins in her investment portfolio, expecting it to achieve breakthroughs in the future and believing that Luca can establish a benchmark image for the new generation of entrepreneurs.
Wallfacer Labs (vaults.fyi) CEO and co-founder Ryan Rodenbaugh stated that new front-end user experiences will drive this breakthrough, making it easier for less experienced users to start using DeFi. Additionally, products with existing distribution channels (such as wallets) providing seamless interactions through embedded DeFi experiences will also be key.
In which stage of the bull market are we, and how long will it last?
'Currently, we may be in the mid-stage of a bull market. Regarding when it will end, we believe we need to consider the significance of Bitcoin ETFs passing.' YBB Capital investment research manager Zeke stated that ETFs place Bitcoin under a centralized regulatory framework, allowing for legal and fully regulated trading, which also means that broader financial derivatives will emerge. As more legitimate participants enter the market, it will directly reduce price volatility. Therefore, in the future, we will find it challenging to see scenarios of significant drops or halving in the short term. Coupled with the diminishing cyclical impact of Bitcoin halving, the market will shift from previous rapid bear-to-bull cycles to a long-term slow bull.
DFG (Digital Finance Group) founder and CEO James Wo also commented on the long-term trajectory of the market, noting that we may currently be in the 'optimistic stage' of the market cycle, with skeptics of crypto beginning to buy and hold some crypto assets, while an increasing number of institutions and governments express interest in the crypto industry. The return of the Trump administration is also expected to promote a more friendly regulatory environment for crypto, and the proposal for Bitcoin as a strategic reserve will undoubtedly further enhance market interest and confidence in Bitcoin and the entire crypto industry.
'Predicting the end of the market cycle is somewhat counterintuitive.' James added that if we expect a market crash like in 2022, this scenario is unlikely to occur because the crypto environment has improved and evolved. Many institutions have begun to follow Microstrategy's lead in accumulating Bitcoin, making it less likely to see a market cycle 'end' and an 80% crash. Future adjustments may occur, but it is unlikely to return to the levels seen during the bear market.
Web3.com Ventures investment director Nemo believes that, in the short term, Bitcoin has at least completed half of its bull market process. He stated that from an optimistic and faith-based perspective, Bitcoin will not let anyone down. The essence of Bitcoin is to combat inflation and safeguard wealth.
How should retail investors seize opportunities in a bull market?
Web3Port co-founder Chris suggests that retail investors should focus on high-certainty sectors, paying particular attention to BTC, meme coins, and AI narrative sectors while cautiously investing in older altcoins lacking new narrative support. Additionally, investors should learn to follow trends, understand market dynamics, and stay aligned with hot topics and focal points of attention. 'Cycles are the core of the market; timely positioning during the arrival of cycles and timely exit before cycles fade is crucial.'
Ryze Labs research analyst Allen stated that bull markets are often the primary reason most people lose money. 'Investors may initially earn unexpected gains, but mid-term, they begin to use borrowed funds and leverage, ultimately turning all unrealized profits into unrealized losses during a rapid pullback, even being forced to sell at a loss.' Allen believes that to avoid this situation, the best strategy is to prepare a sum of money that will not affect current living conditions even if completely lost and withdraw costs at appropriate times, ensuring that the funds remaining in the market are profits. The most taboo practice is to continually add principal and invest more, turning to leverage when principal is insufficient. This approach may seem to rapidly expand gains but is actually highly risky; once the market experiences severe fluctuations, the consequences are often dire.
YBB Capital investment research manager Zeke also pointed out the potential risks of the bull market: 'Market changes in 2025 will be more complex than in previous years; the overall investment strategy needs to be more robust than before 2024. The more the market rises, the more dangerous it becomes. None of us can accurately predict the market direction; we should approach market changes with a sense of awe in 2025.' Zeke stated that investment trading is a form of cultivation, and the crypto market is continuously evolving toward greater maturity and professionalism. Investors should first cultivate internally and then learn externally, maintaining a stable and strong core, always prioritizing risk.
Jsquare partner Dinghan suggests that retail investors should prioritize risk management. 'While cryptocurrencies offer significant return potential, their volatility remains a key issue.' He added that for those seeking passive investments, blue-chip assets like Bitcoin and Ethereum are typically safer choices. For more actively engaged investors, security is crucial—using hardware wallets and trusted security tools. It is essential to focus on high-quality, sustainable projects rather than chasing short-term trends. In any market, identifying assets with long-term superior performance, rather than holding underperforming assets, is vital.
