2025 Crypto Predictions: Will VCs Dive Back into the Crypto Craze?

Welcome to the crypto renaissance of 2024! The industry is experiencing a dazzling resurgence, with a surge in both market strength and an elevated political reputation. As the spotlight returns, other sectors are tuning in, hinting at the possibility of a new crypto bull market, or perhaps a completely fresh narrative altogether.

At Decrypt, we take pride in peering into our Crypto Crystal Ball at the end of each year to forecast the narratives that will shape the next chapter of this thrilling saga—and how they could directly impact you.

This year, we’ve explored Donald Trump’s crypto agenda and the potential of an upcoming Ethereum update to finally usher in mass adoption. Now, let’s dive into how the relationship between crypto and venture capital is on the brink of transformation as we head into 2025—and what that could mean for you.

Back in 2021, crypto was the darling of venture capitalists. However, the moment the digital assets market took a nosedive, our once-celebrated industry became a persona non grata on Wall Street and in Silicon Valley. The words “crypto” and “NFTs” were scrubbed from pitch decks as if they were contagious.

Now that crypto prices are on the rise again, it seems venture capitalists are eager to rekindle their relationships with blockchain developers—acting as if the breakup never even happened.

Heavyweights like Andreessen Horowitz and the iconic startup incubator Y Combinator announced in December that they are once again on the hunt for promising crypto-related ventures in 2025.

Projects centered around stablecoins are particularly in the spotlight. Luke Gebb, who leads American Express’ Digital Labs, shared with Decrypt that 2025 is set to be a game-changer for the stablecoin industry, potentially revolutionizing the payments landscape. Y Combinator is explicitly seeking startups that focus on stablecoins.

So, what’s behind this sudden turnaround? Venture capitalist Turner Novak provides a straightforward answer.

“VCs chase momentum,” Novak remarked to Decrypt. “As prices climb, they’ll always come back to the table.”

But should the crypto community be so quick to embrace VCs again, after the harsh lessons of the past?

Alexander Lin, a blockchain investor at Reforge, firmly believes the industry should resist that temptation. His stance is clear: the previous bull cycle taught us that venture firms poured billions into meaningless crypto ventures just for quick profits, ultimately harming the industry.

“Investments were made in subpar projects, with founders more interested in launching a token than building something meaningful,” Lin told Decrypt.

It’s no surprise, Lin argues. The nature of these investments allowed venture firms to skip the long wait for acquisitions or IPOs to see returns. By getting in early on a crypto project, hyping it, and exiting right after a token launch, they didn’t have to sweat the inevitable crashes that followed. Their bottom line remained intact.

If there’s one lesson traditional VCs should take away from the last crypto bull cycle, Lin suggests, it’s not about investing in sustainable blockchain companies for long-term success, but rather, jumping even earlier into speculative projects.

Lin warns that repeating this cycle could have dire consequences for crypto’s future. To steer clear of a repeat disaster, he insists that crypto projects must reject investors who are only interested in riding the current wave of the $3 trillion market cap; instead, they should align with backers focused on growing crypto to a staggering $20 trillion market cap.

“You don’t achieve that by investing in meme coins, that’s for sure,” Lin stated. “The key lies in investing in foundational infrastructure companies.”