Author: Zen, PANews
As the New Year's bell is about to ring, 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 consolidating their positions, and emerging tracks quietly rising, laying the groundwork for the future. Throughout the ups and downs of this year, VCs, as the barometer of industry development, not only witnessed the changes in the market but also shaped the direction of the industry at the intersection of capital, community, and technology.
At the threshold of 2025, PANews invited more than a dozen top VCs to share their observations and thoughts on the crypto industry. They reviewed the highlights of the past year, analyzed the current market's opportunities and challenges, and made predictions about future development trends. In this rapidly changing field, which projects and tracks are becoming the focus of VCs' attention? Let's step into the VCs' perspectives to explore the 'yesterday, today, and tomorrow' of the crypto industry.
The most impressive projects of 2024
In the past year, the crypto industry has ushered in a new growth wave driven by both market recovery and technological innovation. From infrastructure upgrades to breakthroughs in emerging tracks, countless projects have emerged in this year, showcasing strong vitality and innovative potential. Some of these projects, with unique technical paths or business models, not only attracted significant attention but also left a profound mark both within and outside the industry.
James Wo, founder and CEO of DFG (Digital Finance Group), pointed out that Hyperliquid initially started as a high-performance perpetual contract decentralized exchange (perp DEX), attracting a large number of users while maintaining trading execution speed and liquidity. In addition, the tokens launched by Hyperliquid have no VC backing or listings on centralized exchanges (CEX), making it one of the most successful airdrops in crypto history. 'The platform is expanding its product offerings, launching its own HyperEVM ecosystem, which includes many native decentralized applications (dApps), to increase the practicality of its spot ecosystem. The platform earns substantial fees through on-chain liquidation and market making, gradually eating into the market shares of leading DEXs and CEXs.'
Chris, co-founder of Web3Port, also highly praised Hyperliquid for its market share, community airdrop and distribution mechanism, and wealth effect. Additionally, he mentioned Pump.fun—this year's most successful meme coin launch platform. Compared to existing platforms in the market, Pump.fun successfully elevated the concept of 'Meme launch platform' to a top narrative, igniting a frenzy in the meme market. Chris stated that the inspiration from Pump.fun lies in the fact that Web3 projects can succeed by building truly practical products with high user experience and market fit.
Ryan Rodenbaugh, CEO and co-founder of Wallfacer Labs (vaults.fyi), stated that the revival of mature lending protocols like AAVE and Compound in the DeFi space, as well as the emergence of high-quality newcomers like Morpho, Euler, and Ajna, is exciting. Although DeFi has not received the same attention as in previous cycles, the low-key success of these protocols is still very worthy of attention and tracking.
Among the answers given by various VCs, Pudgy Penguin is one of the most frequently mentioned projects. Joanna, founder and CEO of Jsquare Group, praised Pudgy Penguin, believing that it has single-handedly driven the revival of the entire NFT track. 'As an early investor and Pudgy NFT holder, I have fully felt the strong energy released by Luca as a representative of a new generation of entrepreneurs, which has also solidified one of my fundamental principles: Invest in the next generation.'
'Ethena has performed well in the DeFi space with its USDE stablecoin, profiting from establishing 1x long and 1x short positions on centralized exchanges (CEX) from high funding rates.' Dinghan, a partner at Jsquare, stated that Ethena's collaboration with the BlackRock BUIDL fund ensures that even with negative funding rates, USDE can maintain stable income, further consolidating its long-term viability.
How will the market trend of Bitcoin unfold?
Bitcoin displayed astonishing growth momentum in 2024. According to CoinGecko data, as of December 31, 2024, the price of Bitcoin had increased by 119.1%. This increase was primarily due to the institutional adoption of spot ETFs, the halving event in April, and market optimism following the U.S. elections. Looking ahead to 2025, Chris, co-founder of Web3Port, believes that the Bitcoin bull market is likely to continue, and a breakthrough of $200,000 next year is highly probable. He stated that as the market matures, the supply-demand relationship of Bitcoin will further strengthen, and Bitcoins priced below $50,000 may become a thing of the past in future bull-bear cycles.
Regarding the upper limit Bitcoin can reach next year, Allen, a research analyst at Ryze Labs, holds a similar view. He mainly uses the technical indicators Pi Cycle and 2Y MA Multiplier to determine the peak. He noted that historically, the resonance times of these two indicators were: December 5, 2013, December 16, 2017, and the most recent Pi Cycle peak signal occurrence on April 12, 2021. According to historical data, these indicators have high reference value. Allen pointed out that based on the estimates from the 2Y MA Multiplier, the peak of Bitcoin may be around $200,000. Both of these signals are available as ready-made indicators on TradingView, which can set alerts for convenient peak judgments and position reduction decisions.
'If we predict with a cautious perspective, I think the next peak of Bitcoin may reach between $120,000 and $150,000, followed by fluctuations between $100,000 and $150,000,' stated Evan Lu, an investment manager at Waterdrip Capital. Based on Trump's comments on establishing a Bitcoin strategic reserve, assuming the market value of gold remains unchanged, as long as the market value of Bitcoin fails to surpass that of gold, Bitcoin can be seen as a growth asset, and its price may reach $600,000 per coin, but this process may take 5 to 10 years.
Evan stated that during the last halving cycle (in May 2020), Bitcoin experienced a slow rise, reaching its first peak in April 2021, rising from about $9,000 to $65,000. During the period from April to July, due to the impact of the '519 incident', Bitcoin's price saw a significant correction. However, the market later welcomed a second wave of increases, eventually reaching the previous cycle's peak. If the price on this round's halving day serves as a baseline, it may mark the beginning of a new round of increase. It is expected that between the end of 2024 and the first quarter of 2025, Bitcoin may experience a slight decline or sideways consolidation, followed by a second wave of increase, when the price may reach $120,000 to $150,000.
'Unlike before, the dynamics of this round of the market will be profoundly influenced by multiple factors, among which the most critical include the external liquidity brought by Bitcoin spot ETFs and the sustained capital inflow driven by future Bitcoin reserve policies.' Evan believes that this means that from now until next year's peak, the Bitcoin market may not experience significant corrections but instead maintain a trend of gradual rise, steadily moving towards higher price levels.
In the discussion about Bitcoin, Nemo, the investment director of Web3.com Ventures, quoted the words of MicroStrategy co-founder Michael Saylor: 'If you spend 1,000 hours studying, you will become a Bitcoin extremist. You will realize that this is not just a technology, but a moral justice. Bitcoin brings 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 memes and 'VC coins' continue, and what is the good solution to solve the dilemma?
The series of controversies regarding 'VC coins' has been an important topic that cannot be bypassed in the past year. Will Wang, a partner at Generative Ventures, proposed a novel perspective and viewpoint on this, stating that once the scale of primary market VC funds exceeds $30-50 million, it becomes challenging to deliver excess returns to LPs. Will Wang believes that only with a sufficiently nimble scale can VCs be forced to delve deeper into the early stages, genuinely supporting entrepreneurs in need, thereby nurturing true 'myths'. In contrast, those large-scale VC funds often fall into the trap of expanding their management scale, participating in later rounds, and launching the market-criticized 'VC coins'. This practice is essentially an old issue of Web2 VCs, and in recent years, Web3 VCs have not been spared either.
'I believe this situation will gradually be corrected. Whether through technological or financial innovation, there will always be phases of non-consensus, and this is precisely when VCs should step in. The market will ultimately reward those VCs who dare to act during non-consensus periods.' Will Wang added.
What is the essence of the dispute between memes and VC coins? Chris, co-founder of Web3Port, pointed out that it ultimately boils down to the competition for existing market capital and liquidity. In an environment with limited new funds, VC coins, due to their low circulation and high FDV characteristics, along with the continuous emergence of new VC coin projects, make it difficult for market funds to sustain, significantly reducing retail investors' willingness to take over. The advantage of meme coins lies in their full circulation and fair distribution mechanisms, aligning with the psychology of market investors and becoming a 'new weapon' for retail investors to counter institutional advantages.
However, the PVP (player versus player) nature of meme coins is essentially unsustainable, as most meme coins, apart from a few top meme projects, struggle to possess long-term value support. Chris stated that, from the overall pattern 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, with market participants competing against each other, leading to mutual gains and losses. Regarding the existing dilemma of VC coins, he believes there is currently no good solution in the short term. Against the backdrop of tight market liquidity and the strengthening advantage of institutional investors, alleviating the VC coin issue will require undergoing a complete bull-bear cycle for the market to naturally clear and rebuild trust and fairness.
'Issuing tokens is not the end, but the true starting point of project operation.' Evan Lu, an investment manager at Waterdrip Capital, believes that project teams should not adopt the mindset of 'financing equals profit, token issuance equals shipment.' Instead, they need to seriously consider whether they can truly have application scenarios, whether they can have more stable cash flow, and whether the project can still maintain active users and a real community after token issuance.
Jiawei, the main person in charge of IOSG Ventures, admitted that the 'VC coin project' needs to think better about Token Market Fit, whether there is a necessity to launch tokens, what their use is, and what kind of tokens the community will support, allowing a broader community to participate and decentralize chips to strengthen the binding of interests.
Which ecosystems, tracks, or projects have outstanding performance, becoming the tomorrow's stars in the industry?
As the crypto market rises, new rounds of innovative narratives such as AI and DeSci are driving the industry towards a new stage of development. After experiencing the baptism of market cycles, leading ecosystems continue to consolidate their moats, while emerging tracks and projects are quietly rising, accumulating strength for future explosions. Looking forward to the next year, which ecosystems, tracks, and projects are expected to stand out and become the 'tomorrow's stars' leading the industry? Many institutions have provided unique insights.
Will Wang, a partner at Generative Ventures, believes that many people are not clear about the essence of RWA (Real World Asset). 'We believe RWA is essentially one thing: Let the blockchain account for mainstream global financial assets.' He stated that currently, the penetration rate of this 'on-chain accounting' is less than 0.1%. Even if the penetration rate increases by just one order of magnitude, it may give rise to multiple secondary assets similar to ONDO and USUAL.
Jiawei, the main person in charge of IOSG Ventures, stated that re-staking as the grand narrative of 2024 has not yet been reflected in the coin price. With the gradual launch of AVS, it may see a climax in 2025; additionally, ZK-related projects (such as 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.' Allen, a research analyst at Ryze Labs, said that AI Agents have the ability to process massive market data and will be able to make precise trading decisions in real-time in the future, with response speeds far exceeding traditional human traders; in the DeFi space, AI Agents can optimize lending rates and the pricing mechanisms of liquidity pools, significantly enhancing the efficiency of capital utilization; additionally, they open up new possibilities for intelligent management of crypto assets, redefining the boundaries of asset management.
In this topic, the PayFi track has been repeatedly mentioned by many institutions, undoubtedly becoming the focus of market attention. With the popularization of cryptocurrencies, ecosystems capable of achieving seamless, low-cost payments are ushering in a rapid development period. Dinghan, a partner at Jsquare, predicts that projects bridging traditional finance and cryptocurrencies (such as Layer 2 solutions and stablecoin issuers) will receive widespread attention in the future. Payment protocols that can deeply integrate with mainstream services and conveniently facilitate the conversion between cryptocurrencies and fiat will become a key force driving the integration of cryptocurrencies into daily life.
The integration of AI and blockchain is also regarded 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 ushering in a new growth cycle. Projects that build decentralized AI networks or AI-driven applications are about to emerge, expected to become new highlights in the industry. 'Blockchain provides a trusted foundational layer for AI interactions and transactions, not only enhancing data transparency and security but also opening new horizons for the wide implementation of autonomous AI applications, further accelerating innovation in this field.'
Is the often-discussed 'mass adoption' likely to achieve a breakthrough? Who will hold the holy grail?
'In various fields of the industry, we have already seen some 'mass adoption.' James Wo, founder and CEO of DFG (Digital Finance Group), stated that vertical fields like DePIN are attracting Web2 users, providing value to their ecosystems through additional resources. 'For example, Helium connects existing Web2 telecom giants through 5G networks, and Render provides low-cost GPUs, supporting gaming, rendering, and AI fields.' James believes that the next area likely to drive larger-scale adoption may be the payment sector. Infrastructure that can provide efficient crypto payment and fiat conversion solutions for physical stores will drive a new wave of users, and as retail investors start to invest in and hold crypto assets, this trend will accelerate further.
Zeke, investment research manager at YBB Capital, believes that from recent industry discussions, the payment track is likely to become the first track for blockchain 'Mass Adoption'. Stablecoins have already demonstrated the ability to surpass traditional banking efficiency in non-dollar countries, and for residents of third-world countries, they also provide various utilities such as resistance to domestic currency inflation, virtual service subscriptions, and financial investments. Once a compliance framework is established, the potential of this track is equivalent to the trillion-dollar traditional payment systems of Web2. The massive demand will also give rise to various startups, from upstream stablecoin issuers to downstream payment services, leading to a true flourishing of diverse initiatives. The first large-scale application era of blockchain is likely to begin here.
Joanna, founder and CEO of Jsquare Group, expressed an optimistic attitude towards the progress of 'mass adoption' in the coming year. She stated that mass adoption is, on one hand, about bringing money in (institutions/retail investors), and on the other hand, bringing users in (mainly retail investors). Traditional institutions are more likely to enter the market driven by policy factors, while at the retail level, from the perspective of ecological positioning and track selection, the Solana ecosystem holds a significant advantage. Meanwhile, Joanna has high hopes for Pudgy Penguins in her portfolio, expecting it to achieve breakthroughs in the future, and believes Luca can set a benchmark for a new generation of entrepreneurs.
Ryan Rodenbaugh, CEO and co-founder of Wallfacer Labs (vaults.fyi), stated that the breakthrough will be driven by new front-end user experiences, making it easier for less experienced users to start using DeFi. Additionally, products with existing distribution channels (such as wallets) that provide seamless interactions through embedded DeFi experiences will also become key.
At which stage of the bull market are we, and how long will it last?
'We might currently be in the mid-stage of a bull market, and regarding when it will end, we feel the need to consider the significance of the Bitcoin ETF's approval.' Zeke, investment research manager at YBB Capital, stated that ETFs place Bitcoin within a centralized regulatory framework, making trading legal and fully regulated, which also means that a wider range of financial derivative products will emerge. As legitimate participants become more widespread, this will directly reduce price volatility in the market. Therefore, in the future, it will be challenging to see the possibility of a sudden halving or significant decline in the short term, and coupled with the weakening cyclical impact of Bitcoin halving, the market will transition from previous sharp bears and bulls to long-term slow bulls.
James Wo, founder and CEO of DFG (Digital Finance Group), is also optimistic about the long-term direction of the market. Currently, we may be in the 'optimistic phase' of the market cycle, with skeptics beginning to buy and hold some crypto assets, while more and more institutions and governments express interest in the crypto industry. The return of the Trump administration will also promote a more favorable regulatory environment for cryptocurrencies, and the proposal for a Bitcoin strategic reserve will undoubtedly further enhance the market's interest and confidence in Bitcoin and the entire crypto industry.
'Predicting when the market cycle ends is somewhat counterintuitive.' James added that if we expect a market crash like in 2022, this scenario is unlikely to happen as the crypto environment has improved and developed. Many institutions have begun following MicroStrategy in accumulating Bitcoin in large quantities, so it is unlikely we will see a market cycle 'end' with an 80% crash. There may be adjustments in the future, but it is unlikely to return to the levels seen during the bear market.
Nemo, investment director at Web3.com Ventures, believes that in the short term, Bitcoin has at least completed half of the bull market process. He stated that from an optimistic and faith-based perspective, Bitcoin will not disappoint anyone. The essence of Bitcoin is to combat inflation and safeguard wealth.
How should retail investors seize opportunities in a bull market?
Chris, co-founder of Web3Port, suggested that retail investors focus on high-certainty tracks, paying special attention to BTC, meme coins, and AI narrative tracks, and to invest cautiously in old altcoins lacking new narrative support. Moreover, one should learn to follow the trend, understand market trends, and keep up with hotspots and focal points. 'Cycles are the essence of the market; timely layout when the cycle arrives and timely exit before it recedes.'
Allen, a research analyst at Ryze Labs, stated that bull markets are often the main reason most people lose money. 'Investors might earn unexpected gains in the early stages, but in the mid-term, they start using borrowed funds and leverage, ultimately turning all floating profits into losses in a rapid correction, even being forced to cut losses.' Allen believes that to avoid such situations, the best strategy is to prepare a sum of money that would not affect current living even if completely lost, and to take back costs at appropriate times, ensuring that the funds left in the market are all profits. The most taboo practice is to continuously add principal and keep investing, and when the principal is insufficient, resorting to leverage. This operation seems to rapidly expand gains, but in reality, it carries extremely high risks, and once the market experiences severe fluctuations, the consequences are often dire.
Zeke, investment research manager at YBB Capital, also pointed out the potential risks of the bull market: 'The market changes in 2025 will be more complex than in the past, and overall investment strategies need to be more robust than those before 2024. The more the market rises, the more dangerous it actually becomes. None of us can accurately judge the market direction, and in 2025, we should be more respectful of market changes.' Zeke stated that investment trading is a form of practice, and the crypto market is continually evolving towards greater maturity and professionalism. Investors should first cultivate internally and then learn externally, keeping a stable and strong core, and always prioritizing risk.
Dinghan, a partner at Jsquare, suggested that retail investors should prioritize risk management. 'Although cryptocurrencies have 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 usually safer choices. For more actively involved investors, safety is crucial—using hardware wallets and trusted security tools. Focus on high-quality, sustainable projects rather than chasing short-term trends. In any market, it is essential to identify assets with long-term outstanding performance rather than holding underperforming assets.
Recommended Reading: (The 2024 'Cultivation Manual' of Senior Traders: How to Capture Opportunities from Volatility and Preserve Profits)
