Author | Yogita Khatri
Translated by | Deep Tide TechFlow
Quick overview
● In 2024, venture capital financing in the crypto space grew 28% year-over-year to $13.7 billion, but still did not reach historical peak levels.
● Top crypto venture capital firms believe that funding in 2025 will mainly flow to startups that demonstrate strong product-market fit.
According to The Block Pro's financing data, crypto venture capital financing grew significantly in 2024, up 28% year-over-year to approximately $13.7 billion. Although this achievement shows an improvement compared to 2023, the overall market sentiment this year is also relatively optimistic, but it has not yet returned to previous historical highs.
Looking ahead to 2025, top crypto venture capital firms are cautiously optimistic about the future. While most believe that financing levels are unlikely to return to the highs of 2021-2022, there is a consensus in the industry: startups that can demonstrate strong product-market fit and have an actual user base will find it easier to attract capital.
Below are the specific views of leaders from institutions such as Dragonfly, Pantera, Multicoin, Coinbase Ventures, Binance Labs, and Galaxy Ventures on the financing prospects for 2025.
Dragonfly: Betting on sectors like DeFi, CeFi, and stablecoins
Rob Hadick, a general partner at Dragonfly, stated that due to the gradual loosening of the U.S. regulatory environment, the potential for token prices to continue rising, and the accelerated inflow of institutional capital, crypto venture capital financing is expected to see significant growth in 2025. However, he also noted that it will be difficult for financing levels to return to the highs of 2021–2022 in the short term, reflecting venture capitalists' 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 areas like crypto AI and decentralized physical infrastructure networks (DePINs) are also on the radar, Hadick indicated that these areas are still in the experimental stage.
In contrast, investments in traditional areas such as security, tokenization, and interoperability may decrease as the market's focus 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 1
Lauren Stephanian, a general partner at Pantera Capital, stated that as investors gain confidence in U.S. pro-crypto policies, crypto venture capital financing is expected to grow further in 2025.
However, she also cautioned that 'the bull market will not last forever,' so 'when we will see a slowdown in capital deployment next year remains to be seen.'
Pantera is currently conducting extensive investments in the crypto and blockchain space, with a particular focus on crypto AI, DePINs, and new Layer 1 solutions that support more application-level functions.
Multicoin: Still optimistic about the Solana ecosystem
Multicoin Capital is increasing its layout in DeFi applications, particularly within the Solana ecosystem. According to Kyle Samani, co-founder and managing partner of Multicoin Capital, Solana outperformed Ethereum and Layer 2 ecosystems in key 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 activity migrate to Solana.'
Samani also pointed out that Ethereum may continue to face challenges 'and may even fall into a prolonged decline' as it is facing 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 can better meet their needs.'
Furthermore, Multicoin has great confidence in stablecoins. Samani describes stablecoins as 'perhaps one of the most important technologies and financial innovations of our generation.'
'Stablecoins are expected to become an undeniable force in 2025,' Samani stated. 'There is a strong global demand for the dollar, and stablecoins are the most effective way to access dollars. The design space in this area is vast, and we are still in a relatively early stage on its adoption curve.'
Coinbase Ventures: Focused on on-chain economy, laying out application layer
Hoolie Tejwani, head of Coinbase Ventures, told The Block that the company expects to remain 'highly active' in 2025 and beyond and is prepared to seize market opportunities. Tejwani expressed optimism about the positive regulatory developments that could arise after the pro-crypto Trump administration and supportive Congress in January 2025.
Tejwani revealed that Coinbase Ventures will continue to make extensive investments around the on-chain economy, focusing on 'where the best developers are spending their nights and weekends.' He is particularly optimistic about the application layer, as internet-scale applications are becoming viable with the maturation of infrastructure. 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.
At the same time, 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 tools space.
Binance Labs: Focused on fundamentals and user adoption
Binance Labs is Binance's $10 billion venture capital and incubation arm, and its investment director Alex Odagiu stated that regardless of market cycles, the company always acts as a 'evergreen' investor, continuously supporting startups in the web3, AI, and biotech sectors.
Odagiu expects that crypto venture capital will maintain strong momentum in 2025, but emphasizes that Binance Labs will 'focus on fundamentals' rather than chasing price fluctuations or market hype. He noted that projects with real use cases, 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, a general partner at Galaxy Ventures, stated that stablecoins, especially in the payment sector, still demonstrate strong product-market fit and are a core focus of the company's capital deployment. He believes that while the pace of tokenization may lag behind that of stablecoins for now, the investment potential in this area is huge and worth further exploration.
Although tokenization still lags behind stablecoin adoption, Nuelle sees huge potential for investors. Galaxy Ventures plans to further explore these opportunities. However, Nuelle is not very optimistic about metaverse-related projects, expecting funding to 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 prospects for 2025. He mentioned that Trump's remarks about Bitcoin potentially becoming an asset of the U.S. Treasury may hint at a potential shift in institutional sentiment. However, he believes that financing levels are unlikely to return to the peaks of 2021-2022 in the short term unless unforeseen 'black swan' events occur in the macroeconomic or geopolitical arena.
Kim believes that the market development in 2025 will be influenced by the following factors: greater clarity in the U.S. regulatory environment, increased institutional activity in Asian markets, and advancements in infrastructure driving real-world applications. However, he also warned that regulatory uncertainty, macroeconomic pressures, and geopolitical tensions could stifle 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 seen as having clear product-market fit and mature business models. In contrast, he expects speculative GameFi projects, undifferentiated Layer 1 and Layer 2 protocols, and NFT platforms lacking actual revenue models to face reduced financing.
Hashed plans to complete the fundraising for its third venture capital fund in Q1 2025 and plans to launch a new investment tool in Abu Dhabi to enable direct token investments under the local regulatory framework. Kim stated that this move aims to address 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 as long as unforeseen 'black swan' events do not occur. He noted that a pro-crypto policy environment and a resurgence of entrepreneurial enthusiasm in web3 will be key drivers of this growth.
Hack VC's investment focus is concentrated in the three areas of crypto AI, infrastructure, and DeFi. Roman explains that compared to traditional web2 cloud services, decentralized physical infrastructure networks (DePINs) offer a low-cost way to build multi-layer AI technology stacks, and the potential market size in the crypto space while serving web2 clients could reach trillions of dollars.
In terms of infrastructure, Hack VC is optimistic about the development of scalable protocols, modular infrastructure, web3 security, maximum extractable value (MEV) improvements, and account abstraction technologies. The maturation of these technologies significantly enhances the user experience of decentralized applications.
In the DeFi sector, Hack VC believes that now is a 'once-in-a-century opportunity' to reshape the financial system. Roman is particularly optimistic about stablecoin-based payments, believing that their widespread real-world applications could create a 'trillion-dollar market.' However, the company is not very 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 financing levels may struggle to recover to the peaks of 2021-2022 as the macroeconomic environment during those two years was unique.
Fisher told The Block that Portal Ventures is optimistic about platforms that can simultaneously provide both infrastructure and applications. Such platforms not only allow projects to better control user experience but can also drive the realization of practical use cases. However, he also pointed out that investments in heavier infrastructure projects may slow down, such as zero-knowledge development platforms and middleware, primarily because these projects currently lack sufficient customer bases and sustainable business models.
Blockchain Capital: Focus on stablecoin infrastructure and DeFi
Kinjal Shah, a general partner at Blockchain Capital, expects that as market performance continues to improve, financing levels in 2025 will see an increase. However, she believes that the peak financing levels of 2021-2022 are unlikely to be repeated, as the growth during that period 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 that connect institutions with retail investors.
