In an exclusive interview with Cointelegraph, Deng Chao, CEO of institutional asset manager HashKey Capital, highlighted the growing interest of venture capitalists (VCs) in crypto projects. According to Chao, VCs are particularly drawn to stablecoin products, real-world asset (RWA) tokenization, artificial intelligence, and infrastructure.
Increased Digital Asset Valuations and US Policies Drive VC Interest
Chao attributed this trend to the increased digital asset valuations in 2024 and the tailwinds from the re-election of Donald Trump in the United States. As Chao noted:
"As we enter into a supportive macro environment driven by stimulative US policies and the formalization of crypto regulatory frameworks, these macro tailwinds are set to drive more VC investments heading into 2025."
While the CEO’s outlook is optimistic, he cautioned that macro risks, including geopolitical tensions or increased deficit spending, could increase price volatility and uncertainty in the new year.
Crypto VC Investment vs. VC Investment in Other Tech Sectors
A recent report from Silicon Valley Bank highlights the growth of crypto VC investment compared to other tech sectors:
| Year | Crypto VC Investment | VC Investment in Other Tech Sectors |
| — | — | — |
| 2023 | $10.1 billion | $150 billion |
| 2024 | $13.6 billion | $175 billion |
Real-World Asset Tokenization and Emerging Markets
Chao emphasized that stablecoins are the strongest proven use case for crypto in 2024, with VCs increasingly focusing on stablecoin usage in emerging market economies. Dollar-pegged stablecoins are real-world tokenized assets used as a store of value by individuals in countries with rapidly depreciating local fiat currencies or strict capital controls.
The Growth of Stablecoin Sector
According to a report from Galaxy Digital, the growth of the stablecoin sector is significant:
| Year | Total Value Locked (TVL) |
| — | — |
| 2023 | $10 billion |
| 2024 | $20 billion |
Stablecoins offer cheaper fees, near-instant finality times, and no bank account required, making them a viable method of providing banking services to the unbanked. The World Bank estimates that approximately 1.4 billion people lack access to adequate banking services.
The Role of Stablecoins in Emerging Markets
Stablecoins have become an essential tool for individuals in emerging markets due to their ability to provide a store of value and facilitate financial transactions without the need for traditional banking infrastructure. The growth of stablecoin usage in these markets is driven by the increasing adoption of smartphones with internet access and crypto wallets, which have enabled individuals to bypass inadequate banking systems.
The Projected Growth of Real-World Asset Tokenization
The real-world asset tokenization sector, including government securities, stocks, corporate bonds, stablecoins, collectibles, or any other asset tokenized on a blockchain ledger, is projected to reach up to $30 trillion by 2030.
Total RWA Value, Including Stablecoins
According to a report from RWA.xyz:
| Year | Total RWA Value |
| — | — |
| 2023 | $10 trillion |
| 2024 | $20 trillion |
VC Investment Set to Increase in 2025 but Falls Short of 2021 Peak
Market analyst Infinity Hedge predicts that crypto VC investment in 2025 will surpass last year’s levels but won’t approach the peak recorded during the 2021 bull market. Crypto companies raised approximately $13.6 billion in 2024 compared to $10.1 billion in 2023.
Projected Growth of Crypto VC Investment
According to a report from PitchBook, VC investments in crypto projects are projected to grow to $18 billion in 2025:
| Year | Crypto VC Investment |
| — | — |
| 2023 | $10.1 billion |
| 2024 | $13.6 billion |
| 2025 | $18 billion |
Galaxy Digital’s Forecast
A recent report from Galaxy Digital also forecasted VC investments in crypto projects to grow 50% year-over-year in 2025 but will fail to reach highs established in 2021-2022.
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