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According to Robert Le, an analyst at PitchBook, the sector could attract over $18 billion in venture capital investments next year—a 50% increase compared to 2024.
A Promising Outlook for 2025
Speaking to CNBC, Le expressed optimism about the resurgence of investor confidence in the crypto market. “We’re going to see $18 billion or more in venture capital dollars invested into crypto,” he said, emphasizing the renewed interest from both generalist investors and crypto-native funds.
While the projected figure represents a substantial improvement from the estimated $11–12 billion invested in 2024, it still falls short of the record-setting levels of 2021 and 2022, when investments peaked at $30 billion annually.
The Road to Recovery: 2023 and 2024 Recap
The crypto VC sector was hit hard in 2023 after a litany of industry setbacks and increasing regulatory scrutiny, exemplified by the collapse of FTX, and then compounded by interest rate rises that eroded investor confidence and brought funding to a trickle.
However, 2024 saw a recovery powered by milestones including the greenlighting of spot Bitcoin ETFs. While it did face some mid-year drag, Le maintained that funding in 2024 showed a slight rebound, with investments growing by between 10 and 20% from 2023.
Key Drivers Behind the Surge
Le attributed the anticipated growth in 2025 to several factors:
- Generalist Investors Return: Broader market participants are re-entering the crypto space, paving the way for larger-scale investments.
- Dry Powder in Crypto Funds: Crypto-native funds have substantial capital reserves but require participation from generalist investors to unlock growth potential.
- Institutional Influence: Established financial institutions are expected to leverage their regulatory expertise and networks, playing a critical role in shaping the ecosystem.
Shifting Focus to Applications
As the market matures, Le predicts a strategic pivot from infrastructure projects to application-layer investments. These include decentralized applications (dApps) designed for mainstream users and innovative use cases that extend crypto infrastructure to sectors like mobility and energy data.
Le likened this shift to the evolution of Amazon Web Services (AWS), which provides the foundational infrastructure for businesses like Uber and Airbnb. He argued that robust applications built on crypto infrastructure are essential for realizing the sector’s full potential.
The Role of Regulation in 2025
Regulatory clarity is seen as a crucial factor in fostering growth. Le expressed cautious optimism about the U.S. regulatory environment under the upcoming Trump administration, suggesting that a change in SEC leadership could lead to fewer enforcement actions.
He also highlighted the potential for legislative progress, such as stablecoin bills or crypto-specific rules. However, even the absence of new regulatory measures could positively impact the industry. “If lawmakers and regulators do nothing, that’s already an improvement,” Le remarked.
With institutional involvement, a focus on real-world applications, and a stabilizing regulatory environment, 2025 could mark a turning point for the cryptocurrency sector. As Le concluded, these elements together “set the stage for significant advancements” in the space, signaling a promising future for crypto venture capital investments.