Authors: E. Johansson, L. Kelly, DL News; Translated by: Tao Zhu, Jinse Finance
Venture capital will make a strong comeback in 2025.
This is according to venture capital firms and market observers interviewed before the new year.
What will drive the market up? How much capital do investors hope to deploy?
Mike Giampapa, General Partner at Galaxy Ventures
Mike Giampapa, General Partner at Galaxy Ventures
With the establishment of the most pro-crypto administration and legislative bodies in U.S. history, it is hard to overstate the potential impact this may have on the cryptocurrency industry.
With a more favorable SEC, we expect enforcement actions to decrease, regulation to become clearer, and the likelihood of blockchain companies going public in the U.S. to increase.
We are more optimistic than ever that banks will engage more openly in cryptocurrency, introduce stablecoin legislation, and broader crypto market infrastructure bills.
These measures will create necessary transparency, guardrails, and protections for contractors and users across the industry.
Against this backdrop, the adoption of stablecoins and the use of underlying blockchains as financial rails are expected to accelerate in 2025.
Fintech companies—from newcomers to established firms, from consumer-facing businesses to B2B enterprises—will increasingly integrate with cryptocurrency rails to provide customers with faster, cheaper, and more efficient financial services.
The application of stablecoins will continue to grow, extending beyond savings and payments to spending use cases. We expect merchant acquirers and card networks to increasingly enable crypto payments at checkout, allowing users to use stablecoins as easily as fiat currency.
Alex Botte, Partner at Hack VC
By 2025, we expect venture capital in the cryptocurrency and blockchain space to rebound to previous highs.
Galaxy data shows that venture capital is still significantly lagging behind the peak in Q1 2022, when approximately 1,350 deals amounted to around $12 billion.
In the third quarter, this figure was $2.4 billion, down 80%, involving 478 transactions (down 65%).
This gap is at least partially due to the ongoing lack of traditional venture capital and institutional investors, especially in the U.S.
Private markets, especially early-stage venture capital, often lag behind more liquid markets, while major tokens like Bitcoin and Solana have recently hit historic highs.
However, as market cycles mature and investor confidence rebounds, we expect venture capital to increase, potentially even surpassing previous highs.
With the pro-crypto Trump administration and Congress in place, there is increased clarity in U.S. regulation, potentially attracting more institutional participants than in previous cycles, and venture capital will accelerate.
Robert Le, Cryptocurrency Analyst
Robert Le, Cryptocurrency Analyst at Pitchbook
We predict a revival of venture capital in the cryptocurrency space in 2025, with total funding exceeding $18 billion for the year and multiple quarters exceeding $5 billion in funding.
This would mark a significant rebound during 2023-2024 with an annual average of $9.9 billion and a quarterly average of $2.5 billion.
Macroeconomic stability, institutional adoption, and the return of generalist venture capital may drive this trend.
Heavyweights like BlackRock and Goldman Sachs may increase their engagement in cryptocurrency, which in turn would bolster investor confidence and regulatory trust, paving the way for broader institutional participation.
Their participation may drive mainstream adoption and attract asset management firms, hedge funds, and sovereign wealth funds into the cryptocurrency space.
After a period of retreat, returning generalist venture capital will shift focus to showcasing startups with traditional metrics (such as recurring revenue and measurable attractiveness).
This approach may facilitate a broader integration of cryptocurrency with AI, fintech, and traditional finance, emphasizing sustainable growth rather than speculative investment.
Improvements in global liquidity and declining interest rates will further facilitate venture capital, with token price increases aligning with public and venture markets.
However, this optimistic scenario depends on regulatory stability (especially in the U.S.) and ongoing macroeconomic conditions.
Karl Martin Ahrend, Founding Partner at Areta
Karl Martin Ahrend, Founding Partner at Areta
In 2025, we expect a surge in M&A and IPO activity, highlighting transformative shifts in the industry.
Traditional financial institutions are increasingly entering the space, seeking exposure to crypto projects with strong product-market fit. These companies often lack the expertise to build solutions in-house, driving a wave of partnerships and acquisitions.
Meanwhile, political tailwinds, including the possibility of a more crypto-friendly U.S. SEC under new leadership, are fostering optimism for clearer regulation. This clarity, combined with advancements in security, boosts investor confidence and paves the way for more public offerings and strategic deals.
Looking ahead, this intersection of institutional interests and favorable regulatory shifts may continue to drive M&A and IPO activity, shaping the future of the industry.