Original article by Yogita Khatri
Original translation: TechFlow
Quick Overview
In 2024, venture capital financing in the crypto sector increased by 28% year-on-year to US$13.7 billion, but still fell short of its historical peak.
Top crypto venture capital firms believe that funding in 2025 will flow primarily 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-on-year to approximately $13.7 billion. Although this performance has improved compared to 2023, and the overall market sentiment this year is relatively optimistic, it has not yet returned to its previous historical highs.
Looking ahead to 2025, top crypto venture capital firms are cautious but optimistic about the future. Although most people believe that it will be difficult for financing levels to return to the highs of 2021-2022, there is a consensus in the industry that startups that can demonstrate strong product-market fit and have an actual user base will be more likely to receive capital.
Here’s what leaders from Dragonfly, Pantera, Multicoin, Coinbase Ventures, Binance Labs, Galaxy Ventures, and more have to say about the funding landscape in 2025.
Dragonfly: Betting on DeFi, CeFi and Stablecoins
Rob Hadick, general partner of Dragonfly, said that crypto venture capital financing is expected to grow significantly in 2025 due to the gradual relaxation of the US regulatory environment, the possible continued rise in token prices, and the accelerated inflow of institutional capital. However, he also pointed out that it is difficult for financing levels to return to the highs of 2021-2022 in the short term, which reflects the cautious attitude of venture capital institutions to avoid repeating the same mistakes.
Dragonfly is currently focused on supporting outstanding founders who have demonstrated clear product-market fit in the fields of decentralized finance (DeFi), scaling platforms, centralized finance (CeFi), and stablecoins/payments. While emerging areas such as crypto AI and decentralized physical infrastructure networks ( DePINs ) are also in the spotlight, Hadick said that these areas are still in the experimental stage.
In contrast, investment in traditional areas such as security, tokenization, and interoperability may decrease as the markets attention gradually shifts to newer directions. He also predicts that decentralized social media will face greater challenges due to its lack of scalability and product-market fit.
Pantera: Bullish on crypto AI, DePINs and new Layer 1
Lauren Stephanian, general partner at Pantera Capital, said crypto venture capital financing is expected to grow further in 2025 as investor confidence in pro-crypto policies in the United States grows.
However, she also cautioned that bull markets dont last forever, so it remains to be seen when we start to see a slowdown in capital deployment next year.
Pantera continues to invest broadly in the crypto and blockchain sectors, but is particularly bullish on crypto AI, DePINs, and new Layer 1s that support more application-level functionality.
Multicoin: Continue to be optimistic about the Solana ecosystem
Multicoin Capital is increasing its investment in DeFi applications, especially in the Solana ecosystem. According to Kyle Samani, co-founder and managing partner of Multicoin Capital, Solana has outperformed Ethereum and the Layer 2 ecosystem in key on-chain metrics this year. We expect this trend to continue, and the applications and protocols of the Solana ecosystem will stand out in the next cycle as more users, capital, project issuance, and activities migrate to Solana.
Samani also noted that Ethereum will likely continue to face challenges and “may even fall into a long-term decline” as it faces stiff competition from Solana and other faster, cheaper blockchains. “Unless Ethereum can become more competitive, developers, users, and capital will move to other chains that better meet demand.”
In addition, Multicoin also has great confidence in stablecoins. Samani described stablecoins as probably one of the most important technological and financial innovations of our generation.
“Stablecoins are poised to become a force to be reckoned with by 2025,” said Samani. “There is a strong demand for dollars around the world, and stablecoins are the most efficient way to access them. The design space in this space is very broad, and we are still relatively early in the adoption curve.”
Coinbase Ventures: Focus on the on-chain economy and layout the 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 ready to seize market opportunities. Tejwani expressed optimism about the positive regulatory developments that may come with the United States ushering in a pro-crypto Trump administration and a pro-crypto Congress in January 2025.
Tejwani revealed that Coinbase Ventures will continue to invest extensively around the on-chain economy, focusing on where the best developers are investing their energy at night and on weekends. He is particularly optimistic about the application layer, where Internet-scale applications are becoming feasible as infrastructure matures. 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 stressed that Coinbase Ventures has not completely given up on the infrastructure layer, as there are still unresolved technical challenges and potential innovation opportunities in the tooling space.
Binance Labs: Focusing on fundamentals and user adoption
Alex Odagiu, investment director of Binance Labs, the $10 billion venture capital and incubation arm of Binance, said the company remains an “evergreen” investor, regardless of market cycles, and continues to support startups in the web3, AI, and biotech sectors.
Odagiu expects crypto venture capital to remain strong in 2025, but stressed that Binance Labs will focus on fundamentals rather than chasing price fluctuations or market hype. He pointed out that projects with real 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 of Galaxy Ventures, said that stablecoins, especially in the payment field, still show strong product-market fit and are the core focus of the companys capital deployment. He believes that although the popularity of tokenization lags behind stablecoins for the time being, the investment potential in this field is huge and worth further exploration.
While tokenization still lags behind stablecoin adoption, Nuelle sees huge potential for investors. Galaxy Ventures plans to further explore these opportunities. However, Nuelle is less optimistic about Metaverse-related projects, predicting that funding will lag in 2025 due to a lack of clear signs of adoption.
Hashed: Prudent layout and expansion of global investment
Simon Seojoon Kim, CEO and managing partner of Hashed, is cautiously optimistic about the market outlook for 2025. He mentioned that Trumps remarks that Bitcoin could become an asset of the U.S. Treasury may hint at a potential shift in institutional sentiment. However, he believes that it will be difficult for financing levels to return to the highs of 2021-2022 in the short term unless there is a black swan event in the macroeconomic or geopolitical fields.
Kim believes that market development in 2025 will be influenced by further clarity on the U.S. regulatory environment, growth in institutional activity in Asian markets, and advances in infrastructure to enable real-world applications. However, he also warned that regulatory uncertainty, macroeconomic pressures, and geopolitical tensions could inhibit market growth.
Hasheds investment focus will be on areas such as data infrastructure, institutional-grade DeFi applications, regulated stablecoin payment systems, and crypto AI infrastructure, 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 that lack actual revenue models to face reduced financing.
Hashed plans to complete the raising of its third venture capital fund in the first quarter of 2025 and plans to launch a new investment vehicle in Abu Dhabi to enable direct token investments in accordance with the local regulatory framework. Kim said the move is intended to make up for the limitations of South Korean-registered funds in their ability to make direct token investments.
Hack VC: Betting on Crypto AI, Infrastructure and DeFi
Ed Roman, co-founder and managing partner of Hack VC, said he is optimistic about the outlook for crypto venture capital in 2025, predicting that the market will grow significantly, provided that no unforeseen black swan events occur. He pointed out that the pro-crypto policy environment and the recovery of web3 entrepreneurial enthusiasm will be the key driving forces for this growth.
Hack VCs investment focuses on three major areas: crypto AI, infrastructure, and DeFi. Roman explained that compared with traditional web2 cloud services, decentralized physical infrastructure networks (DePINs) rely on GPUs to provide a low-cost way to build a multi-layer AI technology stack. When serving web2 customers, the potential market size of the crypto field may 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 technology. The maturity of these technologies has significantly improved the user experience of decentralized applications.
In the field of DeFi, Hack VC believes that the current situation is a once-in-a-century opportunity to reshape the financial system. Roman is particularly optimistic about stablecoin-based payments, believing that its widespread practical application may give rise to a trillion-dollar market. However, the company is not optimistic about the prospects of NFTs, predicting that most NFTs will lose value, and only a few blue-chip assets will be able to maintain their value.
Portal Ventures: Supporting platforms that combine infrastructure and applications
Evan Fisher, founder and general partner of Portal Ventures, said he expects market sentiment to recover in 2025, but funding levels may be difficult to return to the peak of 2021-2022 due to the unique macroeconomic environment in those two years.
Fisher told The Block that Portal Ventures is optimistic about platforms that can provide both infrastructure and applications. Such platforms not only allow projects to better control the user experience, but also promote the implementation of actual use cases. However, he also pointed out that investment in heavier infrastructure projects may slow down, such as zero-knowledge development platforms and middleware, mainly because these projects currently lack sufficient customer bases and sustainable business models.
Blockchain Capital: Focus on stablecoin infrastructure and DeFi
Kinjal Shah, general partner at Blockchain Capital, expects funding levels to improve in 2025 as market performance continues to improve. However, she believes that the peak funding levels of 2021-2022 will be difficult to replicate because the growth at that time was largely driven by macroeconomic trends.
Shah said Blockchain Capital will continue to maintain a flexible investment strategy and focus on several key areas, including stablecoin infrastructure, innovative distribution models, and DeFi platforms that can connect institutions and retail investors.
