The Outlook for Encryption VC in 2025: Market Prospects and Potential Opportunities

With the arrival of 2025, the encryption industry is ushering in a new development node. In 2024, the market experienced recovery, innovation, and adjustment, with leading projects consolidating their positions and emerging tracks rising. As a barometer of the industry, VC has not only witnessed market changes but is also shaping the direction of the industry.

Standing at the starting point of 2025, several top VCs shared their observations and thoughts on the encryption industry. They reviewed the highlights of the past year, analyzed current opportunities and challenges, and made predictions about future trends. Let us explore the "yesterday, today, and tomorrow" of the encryption industry from the VC perspective.

Most Impressive Projects of 2024

In the past year, the encryption industry has experienced growth driven by market recovery and technological innovation. From infrastructure to emerging sectors, numerous projects have demonstrated strong vitality and innovative potential.

A well-known VC stated that Hyperliquid, as a high-performance perpetual contract DEX, has attracted a large number of users while maintaining trading speed and liquidity. Its token issuance has become one of the most successful airdrops in crypto history. The platform is expanding its products and launching the HyperEVM ecosystem to increase spot utility. By earning substantial fees through on-chain clearing and market-making, it is gradually eating into the market share of top DEX and CEX.

Another VC highly praised Hyperliquid's market share, community airdrop and distribution mechanism, and wealth effect. He also mentioned that Pump.fun is the most successful meme coin launch platform this year, pushing this concept to top narratives and igniting the meme market craze. This indicates that Web3 projects can achieve success by building practical, high-experience, and relevant products.

In the DeFi sector, the revival of mature lending protocols like AAVE and Compound, along with the emergence of high-quality new players such as Morpho, Euler, and Ajna, is also exciting. Although DeFi has not received the attention it did in previous years, the low-key success of these protocols is still worth noting.

Pudgy Penguin has been mentioned by multiple VCs. One VC stated that it has driven the revival of the entire NFT sector, demonstrating the powerful energy of the new generation of entrepreneurs' integration of Web2 and Web3 thinking, confirming the importance of "investing in the next generation."

Ethena's USDE stablecoin has performed remarkably well in DeFi, profiting from long and short positions established through CEX. Collaborating with a large asset management institution to ensure the long-term viability of USDE.

Bitcoin Market Trend Prediction

In 2024, Bitcoin rose by 119.1%, mainly benefiting from spot ETFs, the halving event, and optimistic sentiment after the election. Looking ahead to 2025, several VCs believe that the bull market is likely to continue, with a high probability of breaking through $200,000.

A certain VC stated that as the market matures, the supply and demand relationship of Bitcoin will strengthen, and prices below $50,000 may become history. Another VC predicts the top will be around $200,000 based on technical indicators.

There are also VC holders who adopt a cautious attitude, expecting a peak of 120,000 to 150,000 USD in stages, followed by a fluctuation between 100,000 and 150,000 USD. In the long term, based on certain politicians' statements, if Bitcoin's market value does not exceed that of gold, the price may reach 600,000 USD, but it will take 5 to 10 years.

Unlike previous years, the current market may maintain a fluctuating upward trend influenced by ETF and reserve policies, gradually rising.

There is a VC citing the views of a well-known industry figure: "After studying for 1000 hours, you will become a Bitcoin extremist. Bitcoin brings freedom, economic and property rights to the world, and also provides companies with the opportunity to invest in non-toxic assets."

The Battle Between Meme and "VC Coin"

The controversy surrounding "VC coins" was an important topic last year. Some VCs believe that large-scale VC funds struggle to bring excess returns to LPs and should focus on early-stage projects. Web3 VCs are facing the same issue, but the situation is gradually improving.

The essence of the competition between Meme and VC coins is the rivalry between existing funds and liquidity. VC coins, due to their low circulation and high FDV characteristics, continuously see new projects launched, making it difficult for market funds to support them. Meme coins, with full circulation and fair distribution, align with the psychology of retail investors, becoming a "weapon" against the advantages of institutions.

However, the PVP attributes of Meme coins are not sustainable. Except for a few top projects, most are difficult to have long-term value. The VC coin dilemma is difficult to resolve in the short term and needs to go through a complete bull-bear cycle to rebuild trust.

Some VCs emphasize that issuing tokens is not the endpoint but the starting point. Project teams need to think about the implementation of application scenarios, stable cash flow, and an active community. Additionally, some VCs suggest that "VC token projects" need to consider Token Market Fit, including the necessity of the token, its uses, and community recognition.

Potential Tracks and Projects

Innovative narratives such as AI and DeSci drive industry development, leading ecosystems consolidate advantages, and emerging tracks are poised for takeoff. Several institutions predict potential tracks for the coming year:

RWA is essentially the blockchain accounting for mainstream global financial assets, and the increase in penetration can stimulate multiple high-quality projects.

Re-staking serves as the major narrative for 2024, with a possible climax in 2025. ZK-based projects ( such as RiscZero and Ingonyama ) will showcase their potential.

AI Agent is expected to become a star of tomorrow, with potential in trading decisions, DeFi optimization, and asset management.

The PayFi sector is gaining attention, with projects that connect traditional finance and encryption, such as Layer 2 solutions and stablecoin issuers (, being highlighted.

The integration of AI and blockchain is an important direction. Decentralized AI infrastructure and Agents are on the rise, with related projects poised to emerge.

Mass Adoption Breakthrough Outlook

Multiple VCs believe that "mass adoption" has already emerged in certain areas. Vertical fields such as DePIN attract Web2 users and provide additional value. The payment sector may drive the next wave of users.

Stablecoins show advantages in non-US dollar countries and have various utilities. The payment sector is expected to become the first large-scale application scenario of blockchain, containing immense potential.

From the perspective of ecological positioning and track selection, a certain public chain ecosystem has a greater leading advantage. The new front-end user experience and embedded DeFi will drive breakthroughs.

Bull Market Phase and Duration

We may currently be in the mid-stage of a bull market. The approval of Bitcoin ETFs means a broader financialization of derivative products, which could reduce price volatility, and the market may shift to a long-term slow bull.

Institutions and governments are showing increased interest in the encryption industry, and the regulatory environment may become more favorable. The proposal for Bitcoin strategic reserves will boost market confidence.

Adjustments may occur in the future, but a 80% crash is unlikely. From an optimistic perspective, Bitcoin, as a tool to combat inflation and protect wealth, will not disappoint investors.

Retail Investor Recommendations

1. Focus on high certainty tracks, pay attention to BTC, Meme coins, and AI narratives, and invest cautiously in old altcoins.
2. Follow the trend and seize the market trends and hot topics.
3. Implement risk management to avoid excessive leverage.
4. Set stop loss and take profit to protect profits.
5. Prioritize blue-chip assets and focus on projects with strong long-term performance.
6. Use secure tools such as hardware wallets.
7. Maintain a calm mindset and prioritize risks.
8. Maintain respect for the market and avoid blindly chasing prices up or down.