From theblock by Yogita Khatri Venture Capital

Quick Take

Crypto venture capital funding rose 28% year-over-year in 2024, reaching around $13.7 billion, according to The Block Pro's Funding Dashboard. While this marked notable progress compared to 2023, the surge still fell short of previous peaks, despite this year's bullish momentum.

Looking ahead to 2025, top crypto VCs are cautiously optimistic. While most agree that funding levels won't return to the highs of 2021-2022, a clear consensus has emerged: startups with strong product-market fit and tangible user adoption are best positioned to attract capital in the year ahead.

Here's what leaders from Dragonfly, Pantera, Multicoin, Coinbase Ventures, Binance Labs, Galaxy Ventures and others shared with The Block about their 2025 funding outlook.

Dragonfly: Betting on DeFi, CeFi, stablecoins and more

Rob Hadick, general partner at Dragonfly, expects significant growth in crypto venture funding for 2025, driven by a loosening U.S. regulatory environment, potential continued token price appreciation and increased institutional capital deployment, he told The Block. However, Hadick doesn't see funding levels reaching the highs of 2021-2022 "for a very long time," — reflecting caution among VCs about repeating past mistakes.

Dragonfly remains focused on backing top founders in areas with proven product-market fit, including decentralized finance (DeFi), scaling platforms, centralized finance (CeFi) and stablecoins/payments. While newer areas like crypto-AI and decentralized physical infrastructure networks (DePINs) are on the radar, Hadick described these as "experiments" for now.

Conversely, Hadick said, investment in categories like security, tokenization and interoperability may decline as the focus shifts to newer sectors. He also predicts challenges for decentralized social media, citing a lack of scalability and product-market fit.

Pantera: Excited about crypto-AI, DePINs and new types of Layer 1 blockchains

Lauren Stephanian, general partner at Pantera Capital, told The Block that crypto VC funding is expected to increase in 2025 as investors are more willing to deploy capital in pro-crypto administration in the United States.

However, "bull markets can't last forever," so it remains to be seen "when we'll start to see deployment slow down within the next year," Stephanian said.

Pantera is continuing to invest broadly in the crypto and blockchain sectors but is particularly excited about crypto-AI, DePINs, and new types of Layer 1 blockchains that enable more app-level functionality, Stephanian said.

Multicoin: Continues to remain bullish on the Solana ecosystem

Multicoin Capital is focusing on expanding its exposure to DeFi applications, particularly within the Solana ecosystem, which has outperformed the Ethereum and Layer 2 ecosystem in key on-chain metrics this year. "We expect this trend to continue and for Solana-based applications and protocols to be big winners in the next cycle as more users, capital, issuance, and activity migrates to Solana's ecosystem," Kyle Samani, co-founder and managing partner of Multicoin Capital, told The Block.

Ethereum will continue to struggle and "may even slip into secular decline" as it faces significant competition from Solana and other faster and cheaper blockchains, Samani said. "Unless Ethereum can compete, developers, users and capital will migrate to other chains that better serve their needs," he added.

Multicoin is also bullish on stablecoins, with Samani describing them as "likely one of the greatest technical and financial innovations of our lifetime." 

"Stablecoins have the opportunity to become a juggernaut in 2025," Samani said. "Everyone in the world wants U.S. dollars, and stablecoins are by far the most efficient way to get them. The design space is vast, and we're still relatively early in the adoption curve."

Coinbase Ventures: Focused on the onchain economy

Coinbase Ventures expects to be "very active in 2025 and beyond" and is well-positioned to seize market opportunities, its head, Hoolie Tejwani, told The Block. The firm is optimistic about constructive regulatory progress in the U.S., fueled by a pro-crypto Donald Trump administration and a supportive Congress entering office in January 2025.

Tejwani said that Coinbase Ventures will continue investing broadly across the onchain economy, guided by "where the best and brightest builders are spending their nights and weekends." The firm is bullish on the application layer, where internet-scale applications are finally possible, thanks to maturing infrastructure. Areas of focus include stablecoin payments and finance, crypto-AI intersections, onchain consumer applications (such as social, gaming and creator apps) and innovations in DeFi.

At the same time, Coinbase Ventures hasn't abandoned the infrastructure layer entirely, as unresolved challenges and new opportunities remain in tooling areas, Tejwani said.

Binance Labs: Prioritizing fundamentals and user adoption

Binance Labs, the $10 billion venture capital and incubation arm of Binance, is an "evergreen" investor. Regardless of market cycles, the firm will continue backing web3, AI and biotech startups, its investment director Alex Odagiu told The Block.

Binance Labs anticipates strong momentum in crypto VC funding in 2025 but remains "laser-focused on fundamentals" rather than price action or market hype. Odagiu emphasized that projects with real-world use cases, product-market fit, strong teams and sustainable revenue models are best positioned to succeed.

Galaxy Ventures: Bullish on stablecoins and tokenization

Galaxy Ventures remains optimistic about the growth potential of stablecoins and tokenization heading into 2025. The firm's general partner, Will Nuelle, told The Block that stablecoins, particularly in payments, continue to show strong product-market fit and remain a key focus area for capital deployment.

While tokenization remains a step behind the adoption of stablecoins, Nuelle sees significant potential for investors. Galaxy Ventures plans to explore these opportunities further. However, Nuelle is less optimistic about metaverse-related projects, predicting lagging funding in 2025 due to a lack of clear adoption signs.

Hashed: Has a measured outlook for 2025

Simon Seojoon Kim, CEO and managing partner at Hashed, shared a measured outlook for 2025, saying that while Trump's remarks about bitcoin as a U.S. Treasury asset hint at a potential shift in institutional sentiment, funding levels are unlikely to return to the 2021-2022 highs. However, this could change significantly if macro or political black swan events arise, Kim told The Block.

He noted that 2025 will likely be shaped by factors such as regulatory clarity in the U.S., growing institutional activity in Asian markets and infrastructure advancements enabling real-world applications. On the downside, Kim cautioned that risks such as regulatory setbacks, macroeconomic uncertainty and geopolitical tensions could dampen growth.

Hashed's 2025 investment priorities include data infrastructure, institutional-grade DeFi applications, regulated stablecoin payment systems and crypto-AI infrastructure — all areas Kim identified as having clear product-market fit, regulatory compliance pathways and proven revenue potential. In contrast, he anticipates reduced funding for speculative GameFi projects lacking sustainable economics, undifferentiated Layer 1 and Layer 2 protocols, consumer DeFi applications in restricted jurisdictions and NFT platforms without clear utility or revenue models.

Hashed plans to close its third venture fund by Q1 2025 and launch a new investment vehicle in Abu Dhabi designed to facilitate direct token investments under the region's regulatory framework. "This strategic expansion addresses the limitations faced by our existing Korea-domiciled Venture Funds where direct token investment capabilities are restricted by local regulations," declining to specify target fund sizes.

Hack VC: Betting on crypto-AI, infrastructure and DeFi

Hack VC expects crypto VC funding to be "appreciably higher" in 2025, barring any black swan events, co-founder and managing partner Ed Roman told The Block. Roman cited a pro-crypto administration and renewed founder interest in web3 as contributing factors.

Hack VC is focused on three main areas: crypto-AI, infrastructure and DeFi. Roman noted that crypto offers unique opportunities for a multi-layer AI stack at lower costs compared to traditional web2 clouds, thanks to GPU-based decentralized physical infrastructure networks (DePINs). "This is a multi-trillion dollar market when serving web2 customers," he said.

On infrastructure, Hack VC remains bullish on scalability protocols, modular infrastructure, web3 security, maximal extractable value (MEV) improvements and account abstraction technologies. These innovations have significantly matured the web3 stack, improving decentralized app (dApp) user experiences, Roman said.

In DeFi, Hack VC sees a "once-in-a-generation opportunity" to streamline the financial system. Roman views stablecoin-based payments as foundational to this system, with vast real-world applications representing "a multi-trillion-dollar market." However, the firm is less optimistic about NFTs, predicting that most will lose value, with only blue-chip assets retaining worth.

Portal Ventures: Backing integrated platforms

Evan Fisher, founder and general partner at Portal Ventures, anticipates that "animal spirits" will return in 2025 but doesn't foresee funding levels returning to the highs of 2021-2022, as those years were unique in their macroeconomic context.

Fisher told The Block that Portal Ventures is bullish on platforms that offer both infrastructure and applications, allowing projects to control user experience and build practical use cases. However, he predicts a slowdown in investment in heavier infrastructure projects, such as zero-knowledge development platforms and middleware, citing a lack of customers and sustainable business models.

Blockchain Capital: Focused on several areas, including stablecoin infra and DeFi

Kinjal Shah, general partner at Blockchain Capital, expects funding levels to rise in 2025 as market strength continues. However, she does not anticipate a return to the highs of 2021-2022, which were influenced by broader macroeconomic trends.

Blockchain Capital remains opportunistic, focusing on areas such as stablecoin infrastructure, innovative distribution models and DeFi platforms that connect institutions and retail.