Crypto Crystal Ball 2025: Will VCs Go Crypto Crazy Again?

2024 saw an undeniable boom for the crypto industry, both in terms of market strength And political reputation. Now, other sectors are taking notice again and creating what could be a repeat of the 2021 crypto bull market, or something completely different.

At the end of each year Declutter looks into the Crypto Crystal Ball to predict the stories that are likely to shape the coming year, and how they are likely to impact you.

After examining Donald Trump’s crypto agenda and the chances that an upcoming Ethereum update could ultimately lead to mass adoption, here’s a look at how crypto’s relationship with venture capital will change in 2025 – and what shift could mean .

In 2021, crypto was the belle of the VC ball. But once the digital asset market crashed, our new industry suddenly became a reality persona non grata on Wall Street and in the Bay Area. Any mention of crypto or NFTs was scrubbed from project pitch decks like the Black Plague.

With crypto prices finally rising again, it seems like venture capitalists are already trying to get back together with blockchain developers – and pretend the breakup never happened.

Both VC giant Andreessen Horowitz and famed Silicon Valley startup incubator Y Combinator announced in December that they are again eagerly trying to support crypto-related projects in 2025.

Of particular interest are projects related to stablecoins. Luke Gebb, head of American Express’ Digital Labs division, said Declutter that 2025 “will be a pivotal year for the stablecoin industry” that “could transform the payments landscape.” Indeed, Y Combinator is specifically looking for stablecoin-related startups.

Why this sudden turnaround? Turner Novak, a tech-focused venture capitalist, thinks the answer is brutally simple.

“VCs chase momentum,” Novak said Declutter. “They will always come back when prices rise.”

But should crypto take back VCs so quickly, years after they were dumped?

Alexander Lin, a blockchain-focused investor at Reforgeis convinced that the industry must resist this impulse. According to Lin, the lesson of the last bull cycle was that venture capital firms dumped billions of dollars into worthless crypto projects to make a quick buck, and the industry suffered greatly as a result.

“They invested in dog poop projects, founders who had misaligned incentives, and projects whose only priority was to quickly launch a token,” Lin said. Declutter.

It makes sense why, Lin said. By investing in such projects, venture firms could avoid the years of waiting for an acquisition or IPO to make a profit. If these companies started a crypto project early, hyped it up, and exited shortly after a token launch, it didn’t matter if the token – and the project –crashed months later. The gamble was successful on the VC’s balance sheet.

If traditional VCs have learned one thing from the last crypto bull cycle, Lin said, it’s not to invest in sustainable blockchain companies that will grow over time; it will instead be to intervene even earlier in speculation-fueled projects.

Lin thinks this cycle, if repeated, could be detrimental to crypto’s long-term prospects. To avoid such an outcome, he says it is essential for crypto projects to turn away investors looking to get their beaks wet in the current cryptocurrency. $3 trillion market capitalization; he said projects should instead only partner with backers focused on growing crypto to a $20 trillion market cap.

“You won’t get there by investing in meme coins, that’s for sure,” Lin said. “You achieve this by investing in fundamental infrastructure companies.”