Crypto VC Funding Poised for Major Rebound in 2025, Potentially Exceeding $18 Billion
The world of crypto venture capital has been a bit of a wild ride in 2024. After a strong start, things cooled off a bit during the summer months, according to Robert Le, an analyst at PitchBook. While third-quarter activity dipped slightly, Le attributes this to the typical summer slowdown that affects many industries. It appears that some crypto-focused VC firms, even those with substantial reserves, pumped the brakes on new investments during this period.
However, recent indications suggest that the tide might be turning. While the concrete data isn't available yet, Le points to growing buzz that suggests investment activity may have picked up again in the closing months of 2024.
Looking ahead, Le forecasts a potentially explosive year for crypto venture investments. He anticipates that total investments could surpass $18 billion, with the possibility of multiple quarters exceeding the $5 billion mark each. To put that into perspective, 2023 saw around $9 billion in total investments. This year is shaping up to land somewhere north of $11 billion, with quarterly investments ranging between $2 billion and $2.5 billion.
One of the key drivers of this anticipated surge, according to Le, is the expected return of generalist venture capital firms to the crypto space. These firms, which typically invest across a wider range of sectors, are anticipated to significantly increase their allocation to crypto in the coming year.
The intersection of crypto and artificial intelligence (AI) is also likely to remain a hotbed of activity. While initially perceived by some as merely a trendy pairing of buzzwords, the emergence of practical use cases has demonstrated the real-world potential of combining these two technologies. As the AI field continues to mature and its challenges become clearer, crypto companies are well-positioned to offer innovative solutions. Le believes this dynamic will continue to attract significant investment.
In short, after a somewhat turbulent 2024, the crypto venture capital landscape appears poised for a major upswing in 2025. The projected figures represent a substantial leap from previous years, driven by renewed interest from both specialized and generalist investors. The fusion of crypto and AI, in particular, is shaping up to be a focal point for innovation and investment. The coming year will be a critical one to watch as these predictions unfold.