Cryptocurrency Venture Capitalists Reveal Their Key Investment Priorities for 2025

Stablecoins, RWA Tokenization, AI, and Infrastructure Attract Venture Capital

Deng Chao, CEO of institutional asset manager HashKey Capital, recently shared his insights with Cointelegraph on the crypto market’s prospects for 2025. According to Chao, crypto projects will attract more capital from venture capitalists in the upcoming year, driven by increased digital asset valuations and supportive macro environments.

Table of Contents

Supportive Macro Environment Drives VC Investment

The CEO emphasized that the re-election of Donald Trump in the United States will contribute to a positive outlook for crypto investments. Chao stated:

"As we enter into a supportive macro environment driven by stimulative US policies and the formalization of crypto regulatory frameworks, these macro tailwinds are set to drive more VC investments heading into 2025."

Despite this optimistic forecast, Chao cautioned that macro risks, including geopolitical tensions or increased deficit spending, could increase price volatility and uncertainty in the new year.

Crypto VC Investment vs. Other Tech Sectors

A comparison of crypto venture capital investment with other tech sectors reveals a steady growth trend. According to data from Silicon Valley Bank, crypto VC investment has been increasing over the past few years, reaching approximately $13.6 billion in 2024.

Real-World Asset Tokenization and Emerging Markets

Stablecoins were identified as the strongest proven use case for crypto in 2024, with venture capitalists increasingly focused on stablecoin usage in emerging market economies. Dollar-pegged stablecoins are being used as a store of value by individuals in countries with rapidly depreciating local fiat currencies or strict capital controls.

The growth of the stablecoin sector has been impressive, with an estimated 1.4 billion people lacking access to adequate banking services worldwide. This lack of banking services is primarily due to insufficient infrastructure in developing countries, which can be solved by smartphones with internet access and crypto wallets.

Real-World Asset Tokenization Sector

The real-world asset tokenization sector, which includes government securities, stocks, corporate bonds, stablecoins, collectibles or any other asset tokenized on a blockchain ledger, is projected to reach up to $30 trillion by 2030. This sector has been growing rapidly, with total RWA value, including stablecoins, increasing steadily over the years.

VC Investment Set to Increase in 2025 but Falls Short of 2021 Peak

Market analyst Infinity Hedge predicted that crypto VC investment in 2025 would surpass last year’s levels but wouldn’t approach the peak recorded during the 2021 bull market. Crypto companies raised approximately $13.6 billion in 2024, compared to $10.1 billion in 2023.

According to market data platform PitchBook, VC investments in crypto projects are projected to grow to $18 billion in 2025. A recent report from Galaxy Digital also forecasted VC investments in crypto projects to grow 50% year-over-year in 2025 but will fail to reach highs established in 2021-2022.

Conclusion

In conclusion, the crypto market is expected to attract more capital from venture capitalists in 2025, driven by increased digital asset valuations and supportive macro environments. While stablecoins and real-world asset tokenization are attracting significant attention, VC investment is projected to grow but will fall short of the peak recorded during the 2021 bull market.

Key Takeaways

Crypto projects will attract more capital from venture capitalists in 2025
Increased digital asset valuations and supportive macro environments drive VC investment
Stablecoins and real-world asset tokenization are attracting significant attention from VCs
VC investment is projected to grow but will fall short of the peak recorded during the 2021 bull market

Related Articles