Quick overview
In 2024, venture capital funding in the crypto sector grew by 28% year-on-year, reaching $13.7 billion, but has not yet reached 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 funding data from The Block Pro, crypto venture capital funding in 2024 grew significantly, increasing by 28% year-on-year to approximately $13.7 billion. Although this achievement has improved compared to 2023, and the overall market sentiment this year is relatively optimistic, it has not yet recovered to previous historical highs.
Looking ahead to 2025, top crypto venture capital firms hold a cautious yet optimistic attitude toward 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 having a real user base will find it easier to attract capital.
Here are the specific views on the 2025 funding outlook from leaders in institutions such as Dragonfly, Pantera, Multicoin, Coinbase Ventures, Binance Labs, and Galaxy Ventures.
Dragonfly: Betting on 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 token prices to continue rising, and the accelerated inflow of institutional capital, crypto venture capital funding in 2025 is expected to achieve significant growth. However, he also noted that funding levels are unlikely to return to the highs of 2021-2022 in the short term, reflecting the cautious attitude of venture capital firms to avoid repeating past mistakes.
Dragonfly is currently focused on supporting outstanding founders who demonstrate clear product-market fit in decentralized finance (DeFi), scalability platforms, centralized finance (CeFi), and stablecoin/payment fields. While emerging areas like crypto AI and decentralized physical infrastructure networks (DePINs) are also on their radar, Hadick indicated that these areas are still in experimental stages.
In contrast, investments in traditional areas such as security, tokenization, and interoperability may decrease as the market's focus gradually shifts toward 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 types of Layer 1
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 cautioned that "bull markets do not last forever," so "when we will start seeing a slowdown in capital deployment next year remains to be seen."
Pantera is currently continuing extensive investments in the crypto and blockchain space, particularly optimistic about crypto AI, DePINs, and new types of Layer 1 that support more application-level functionality.
Multicoin: Continuing to be optimistic about the Solana ecosystem
Multicoin Capital is increasing its focus on DeFi applications, particularly within 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 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 issuances, and activities migrate to Solana."
Samani also pointed out that Ethereum may continue to face challenges and "may even fall into a prolonged recession" 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 describes stablecoins as "possibly one of the most important technological and financial innovations of our generation."
"Stablecoins are expected to become a force to be reckoned with in 2025," Samani stated. "There is strong global demand for the dollar, and stablecoins are the most effective way to obtain dollars. The design space in this area is vast, and we are still in a relatively early stage of its adoption curve."
Coinbase Ventures: Focused on the on-chain economy, layout of 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 is optimistic about the potential positive regulatory developments following the pro-crypto Trump administration and supportive Congress in January 2025.
Tejwani revealed that Coinbase Ventures will continue to invest broadly around the on-chain economy, focusing on "where the best developers are putting in their efforts at night and on weekends." He is particularly optimistic about the application layer, as applications at internet scale are becoming viable with maturing 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.
Meanwhile, Tejwani emphasized that Coinbase Ventures has not completely abandoned the infrastructure layer, as there remain unresolved technical challenges and potential innovation opportunities in the tooling space.
Binance Labs: Focused on fundamentals and user adoption
Binance Labs, the $10 billion venture capital and incubation arm of Binance, has its investment director Alex Odagiu stating that regardless of market cycles, the company continues to act as a "evergreen" investor, consistently supporting startups in web3, AI, and biotechnology.
Odagiu expects that crypto venture capital in 2025 will maintain strong momentum, but emphasized that Binance Labs will "focus on fundamentals" rather than chasing price fluctuations or market speculation. He pointed out that projects with actual 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 payment space, continue to show strong product-market fit and are a core focus of the firm's capital deployment. He believes that although the pace of tokenization adoption is temporarily 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 huge potential for investors. Galaxy Ventures plans to further explore these opportunities. However, Nuelle is not very optimistic about metaverse-related projects, expecting that funding will lag in 2025 due to the 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 on the market prospects for 2025. He mentioned that Trump's comments about Bitcoin potentially becoming an asset of the U.S. Treasury might signal a potential shift in institutional sentiment. However, he believes that funding levels are unlikely to return to the highs of 2021-2022 in the short term unless there are 'black swan' events in the macroeconomic or geopolitical fields.
Kim believes that market development in 2025 will be influenced by the following factors: further clarification of the U.S. regulatory environment, growth of institutional activity in Asian markets, and advancements in infrastructure driving the realization of practical applications. However, he also warned that regulatory uncertainty, macroeconomic pressures, and geopolitical tensions could suppress market growth.
Hashed's investment focus will be on data infrastructure, institutional-grade DeFi applications, regulated stablecoin payment systems, and crypto AI infrastructure, among other areas, which are considered to have 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 funding.
Hashed plans to complete the fundraising for its third venture capital fund in the first quarter of 2025 and intends to launch a new investment vehicle 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 the pro-crypto policy environment and the resurgence of web3 entrepreneurial enthusiasm will be key drivers of this growth.
Hack VC's investment focus is on three main areas: crypto AI, infrastructure, and DeFi. Roman explains that compared to traditional web2 cloud services, decentralized physical infrastructure networks (DePINs) provide a low-cost way to build multi-layer AI technology stacks, and the potential market size in the crypto sector when serving web2 clients could reach 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 technologies. The maturity of these technologies significantly enhances 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 applications could give rise to a "multi-trillion dollar market." However, the company is not very optimistic about the prospects of NFTs, expecting that most NFTs will lose value, with only a few blue-chip assets able to retain their value.
Portal Ventures: Supporting platforms that combine infrastructure and applications
Evan Fisher, founder and general partner at Portal Ventures, expressed that he expects market sentiment to improve in 2025, but funding levels may struggle to recover to the peak periods of 2021-2022, as those two years had a unique macroeconomic environment.
Fisher stated in an interview with The Block that Portal Ventures is optimistic about platforms that can simultaneously provide 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 pointed out that investment in heavier infrastructure projects may slow down, such as zero-knowledge development platforms and middleware, primarily due to these projects currently lacking adequate customer bases and sustainable business models.
Blockchain Capital: Focused on stablecoin infrastructure and DeFi
Kinjal Shah, general partner at Blockchain Capital, expects that with continued positive market performance, funding levels in 2025 will see an increase. However, she believes that the peak funding levels of 2021-2022 are unlikely to be replicated, as that growth 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 can connect institutions with retail investors.
