Deng Chao, the CEO of HashKey Capital, predicts that 2025 will mark a year of heightened capital inflows into crypto projects from venture capitalists. He argues that several converging forces will draw more VC money into the space, including the shifting macro environment, the maturing regulatory landscape for digital assets, and a growing pipeline of use cases across stablecoins, real-world asset (RWA) tokenization, artificial intelligence-enabled infrastructure, and essential crypto infrastructure. In his view, 2024’s higher digital asset valuations, combined with favorable political and regulatory tailwinds in the United States, create a fertile environment for capital to flow into crypto projects in the new year. He emphasizes that the macro backdrop matters: supportive fiscal and monetary policy, paired with formalized crypto regulation, can act as a powerful driver of venture funding into 2025. At the same time, Chao cautions that macro risks—such as geopolitical tensions or rising deficit spending—could heighten price volatility and inject uncertainty as the year unfolds. The broader implication is that while the VC pipeline appears robust, investors will remain vigilant about external shocks and policy shifts that could affect crypto valuations and funding dynamics.
Macro backdrop and venture capital outlook for 2025
A macro environment primed for crypto investment
The senior executive stresses that the entering year could feature a favorable macro environment shaped by stimulative policy measures in the United States and a formalization of crypto regulatory frameworks. This combination is seen as a set of tailwinds that could sustain or accelerate venture investments in crypto projects into 2025. The argument hinges on the idea that policy clarity reduces uncertainty, expands institutional participation, and improves the risk-return calculus for specialized crypto ventures. In practical terms, this means more venture funds, both traditional and crypto-focused, viewing digital assets as a legitimate, long-duration investment. The result could be a broader allocation to crypto ventures, alongside a continuation of capital flows into sub-sectors such as stablecoins, RWA tokenization, and crypto infrastructure. Yet, the same macro context that supports growth also exposes the market to potential volatility if policy trajectories shift, deficits rise, or geopolitical tensions flare. In short, the 2025 outlook combines optimism about structural growth in blockchain-enabled finance with prudent attention to macro-risk scenarios that could temper sentiment.
Sector and geographic focus shaping VC appetite
Chao indicates that venture capital attention will be disproportionately drawn to stablecoins, RWA tokenization, artificial intelligence applications, and essential crypto infrastructure. These areas are deemed to offer clearer use cases and scalable revenue models, particularly in regions and markets where traditional financial channels are constrained or unstable. The narrative around stablecoins is expanding beyond a mere payment instrument; VCs are increasingly evaluating stablecoins as platforms for cross-border remittances, liquidity provisioning, and as stabilizing anchors for DeFi ecosystems. In emerging markets, where currencies are volatile or capital controls are strict, stablecoins are positioned as practical stores of value and gateways to systemic financial inclusion. The broader stablecoin value proposition is tied to cheaper fees, near-instant settlement, and the elimination of dependence on fragile banking infrastructure. This dynamic dovetails with the World Bank’s observations about a large population lacking adequate banking services, suggesting a potential long-term expansion in crypto-enabled financial access as mobile and wallet penetration grows.
AI, infrastructure, and the evolution of crypto markets
A noteworthy theme in Chao’s commentary is the emphasis on artificial intelligence and the corresponding need for robust infrastructure to support AI-enabled financial services. As AI tools become more pervasive in trading, risk management, compliance, and customer experience, the crypto sector could see enhanced efficiency, safety, and scale. Investments in infrastructure—such as scalable blockchain networks, secure custody, cross-chain interoperability, and compliant onboarding solutions—are positioned to benefit from this AI-driven demand. These areas promise to lower entry barriers for institutional participants and improve service quality for end users, potentially widening the market’s addressable audience. The combination of AI-enabled capabilities with solid infrastructure may enable more sophisticated financial products and services, which in turn could attract larger, more experienced VC funds seeking durable competitive advantages. The implication is that 2025 could be a year where technical maturity and practical utility align to unlock deeper capital allocation to crypto ventures.
Risks and resilience considerations for 2025
Despite the upbeat outlook, Chao underscores that macro risk remains a salient counterpoint. Geopolitical tensions, fiscal deficits, and policy reversals could contribute to heightened volatility across crypto markets. Investors may respond to these risks by demanding stronger risk controls, clearer regulatory expectations, and more rigorous due diligence. In practice, this could translate into increased emphasis on risk management frameworks, transparent governance, and credible business models that demonstrate resilience in adverse scenarios. The potential for volatility does not undermine the long-term strategic case for crypto ventures, but it does justify a cautious approach to maximizing upside while mitigating downside. The overall message is that 2025 may be characterized by a bifurcated environment: strong demand for high-potential use cases and platforms, tempered by vigilance around macro and geopolitical developments that could reshape risk-reward paradigms.
Historical context: crypto VC flows in 2023–2024
To contextualize the 2025 outlook, it is useful to consider the recent trend in crypto venture capital investments. In 2024, crypto companies collectively raised about $13.6 billion, up from roughly $10.1 billion in 2023. This growth reflects a warming appetite among venture capitalists for blockchain-enabled businesses, even as the market continues to navigate regulatory and macro headwinds. Market observers anticipate continued growth into 2025, with projections suggesting substantial but not unprecedented activity relative to peaks seen in prior cycles. Industry data platforms indicate that venture capital investments in crypto projects could climb to around $18 billion in 2025, signaling a continued expansion but also a cautious stance as investors weigh regulatory clarity and macro stability. Analysts also note a mixed picture: some forecasts point to a year-over-year increase in crypto VC activity, while others suggest that the 2021–2022 peak remains out of reach in the near term. Taken together, these perspectives illustrate a sector-wide expectation of growth tempered by historical cycles and current risk factors.
Market projections and investor sentiment
A prevailing narrative among analysts is that 2025 could show a notable acceleration in venture funding for crypto projects, driven by the perceived acceleration of real-world product adoption and institutional acceptance. Nevertheless, the same analyses highlight that the sector’s peak funding levels may lag behind the extraordinary highs observed during the 2021–2022 crypto boom. The consensus suggests a trajectory of growth, with mid-term stabilization and maturation of business models that attract more conservative, qualified investors who seek measurable traction, profitability, and governance standards. This nuance matters for how capital allocation might unfold: more funds dedicated to high-potential use cases, more emphasis on revenue generation, user growth, and regulatory compliance, and a greater demand for transparent, auditable performance metrics. The overarching takeaway is that while optimism remains warranted, it is paired with disciplined risk management and a careful calibration of expectations regarding cap tables, burn rates, and exit potential.
Stablecoins: driver of real-world value and financial inclusion
Stablecoins as a core crypto use case in 2024
Deng Chao identified stablecoins as the strongest proven use case for crypto in 2024, with venture capital increasingly concentrating on their deployment across emerging markets. The logic is that dollar-pegged stablecoins offer practical advantages for users and institutions facing currency volatility, capital controls, or underdeveloped domestic banking systems. For individuals in countries with rapidly depreciating local fiat currencies, stablecoins provide a more stable store of value and a reliable medium of exchange. In parallel, stablecoins can serve as a bridge for remittances and cross-border payments, reducing cost and settlement times compared with traditional systems. The VC emphasis on stablecoins reflects a belief that these instruments can deliver tangible, scalable benefits, particularly in regions where financial infrastructure is weakest.
Real-world benefits: banking, remittances, and financial inclusion
The broader appeal of stablecoins is rooted in their practical capacity to expand financial access. They can deliver cheaper transaction fees, faster settlement, and, crucially, the possibility of a financial footprint in places where opening a bank account is difficult or impossible. Their operation does not require traditional bank accounts, which aligns well with the needs of unbanked or underbanked populations. In many developing markets, smartphones with internet connectivity and crypto wallets provide a pathway to participate in the digital economy, bypassing some structural barriers. This reality helps explain why protean growth in stablecoin adoption is seen as a lever to extend financial services to a wider audience. The World Bank’s reported figure that approximately 1.4 billion people lack adequate banking services underscores the potential market for crypto-enabled financial products that do not rely on conventional banking infrastructure.
Emerging market dynamics and regulatory implications
The deployment of stablecoins in emerging markets is not merely about payments; it also intersects with regulatory considerations and monetary policy. As stablecoins become more widely used for value storage and cross-border transactions, regulators face questions about systemic risk, liquidity management, reserve transparency, and consumer protection. The balance between enabling innovative financial services and preventing financial fragility will shape how quickly stablecoins scale in different jurisdictions. For venture capital, this means opportunities to back compliant, scalable stablecoin platforms, wallet solutions, and ecosystem services that can operate under clear regulatory guidelines. The potential for cross-border use cases—such as international remittances, price stability tools for import/export activities, and hedging strategies for small businesses—further broadens the addressable market for stablecoin-focused ventures.
Implications for financial inclusion and global growth
If stablecoins continue to gain traction in both developed and developing markets, they could play a pivotal role in accelerating financial inclusion. The combination of reduced barriers to entry and enhanced accessibility aligns with the broader goal of expanding access to financial services for underserved populations. Stablecoins could support new business models, such as microtransactions, localized e-commerce, and wage disbursement schemes, all powered by tokenized, dollar-pegged assets. The resulting ecosystem could attract non-traditional investors, including development-focused funds and regional financial institutions seeking innovative methods to promote inclusion while maintaining prudence around risk management and compliance. The interplay between market demand, regulatory clarity, and technical innovation will determine how quickly stablecoins transition from pilot programs to mainstream infrastructure that underpins everyday financial activity for millions.
Real-world asset tokenization and the broader market
What real-world asset (RWA) tokenization encompasses
Real-world asset tokenization refers to the process of representing tangible assets on a blockchain ledger as tokens. This category spans government securities, stocks, corporate bonds, stablecoins, collectibles, and virtually any asset that can be digitized and traded on a distributed ledger. Tokenization enables fractional ownership, enhanced liquidity, and programmable features that can streamline settlement, governance, and cash flows. By enabling fractionalization, tokenization can unlock accessibility to assets that were previously unavailable to individual investors due to high ticket sizes. The RWA space is seen as a bridge between traditional finance and the digital asset ecosystem, offering a conduit for mainstream adoption through familiar asset classes and regulated frameworks.
The scale of the RWA opportunity
Experts project that the total value of real-world assets tokenized on blockchain could reach up to $30 trillion by 2030. This forecast reflects the belief that tokenization will transform how assets are issued, traded, and managed, creating new channels for liquidity and capital formation. The potential is particularly pronounced for assets such as government securities and high-quality corporate bonds, where tokenized issuance can reduce settlement times, improve transparency, and lower operating costs. Stablecoins as a tokenized asset class can also play a crucial role within RWA ecosystems, providing stable liquidity and a resilient settlement layer. The broad implication is that RWA tokenization could become a dominant driver of long-term growth in the crypto and digital asset spaces, integrating with traditional markets while enabling novel financial products and services.
Types of assets and their tokenization pathways
RWA tokenization includes a wide spectrum of asset types. Government securities can be tokenized to enable programmable coupon payments and fractional ownership, increasing accessibility for a broader investor base. Stocks and corporate bonds can be issued or tokenized to improve liquidity, enable rapid settlement, and facilitate cross-border trading. Stablecoins themselves can act as a stable settlement medium within RWA markets, reducing counterparty risk and settlement latency. Collectibles and other intangible assets can be tokenized to create new markets for unique digital representations and ownership rights. The overarching objective is to create a more efficient, transparent, and accessible environment for real-world assets by leveraging blockchain technology, smart contracts, and digital wallets.
Market dynamics, adoption, and regulation
The trajectory of RWA tokenization will be shaped by market demand, regulatory developments, and the capacity of technology to deliver secure, scalable solutions. Regulatory clarity is critical to unlocking institutional participation in RWA markets, as banks and asset managers require robust governance, clear custody arrangements, and enforceable legal frameworks. Adoption will also depend on the interoperability between traditional custodians, regulators, and crypto-native infrastructure providers. The potential liquidity benefits of RWA tokenization—combined with the efficiency gains from token-based settlement and governance—could attract a broader set of market participants, including institutional investors seeking diversified portfolios and authors seeking to manage risk more effectively. The expectation is that RWA tokenization will continue maturing through pilot programs and phased rollouts, gradually expanding into mainstream asset classes as technology, policy, and market confidence converge.
Growth projections and investment implications
With a multi-trillion-dollar opportunity on the horizon, venture capital and institutional investment will be pivotal in moving RWA tokenization from concept to widespread practice. The capital inflows will likely target platforms that can efficiently tokenize, custody, and settle real-world assets, while providing rigorous compliance and risk management. Investors will seek platforms with scalable security models, transparent asset provenance, and robust legal frameworks to govern tokenized assets. The anticipated growth in RWA tokenization will influence the broader crypto market by enhancing liquidity, enabling new revenue streams, and creating more resilient financial products that blend traditional asset classes with blockchain-enabled features. In sum, RWA tokenization represents a major structural development for the financial ecosystem, with potential to reshape asset liquidity, access, and investment strategies in the coming years.
VC investment trends: past performance and 2025 predictions
The 2023–2024 funding trajectory
Industry data shows that crypto-related companies raised approximately $13.6 billion in 2024, up from about $10.1 billion in 2023. This upward trend signals growing investor confidence in crypto and blockchain ventures, even as the sector navigates regulatory changes and macroeconomic headwinds. The trajectory suggests that venture capital remains a credible capital source for crypto startups, with investors seeking to diversify into blockchain-enabled business models, decentralized infrastructure, and innovation-driven platforms. The year’s activity reflects a willingness to back early-stage and growth-stage companies that demonstrate real-world traction, competitive differentiation, and scalable monetization strategies. The rising funding levels imply an expanding ecosystem of startups, service providers, and platforms that collectively contribute to market maturation and institutional comfort with digital assets.
2025 expectations and professional forecasts
Analysts anticipate that venture capital investment in crypto projects could grow further in 2025, with projections around $18 billion for the year. While this implies a solid year-over-year increase, some market observers caution that the 2021 peak may remain out of reach in the near term. The consensus is that 2025 will likely deliver continued growth in venture funding, underpinned by a broader acceptance of crypto technologies, more mature business models, and clearer regulatory guidance. Market participants expect that capital allocation will gradually shift toward projects with demonstrated product-market fit, tangible revenue streams, and durable competitive advantages. The growth path into 2025 may also reflect a diversification of investors, with more traditional financial institutions and corporate venture arms entering the crypto space, bringing a more conservative yet scalable approach to deployment.
Galaxy Digital and other forward-looking projections
A 2025 outlook from Galaxy Digital forecasted a 50% year-over-year increase in VC investments in crypto projects but stopped short of surpassing the highs reached in 2021–2022. This projection aligns with a broader sense that while the market is expanding, the confidence to reach the earlier speculative peaks remains tempered by macro and regulatory uncertainties. Other market analyses, including those from Infinity Hedge and PitchBook, present related narratives: a generally rising trend in 2025, with a caveat that the ultimate level may hinge on policy developments, market cycles, and the pace at which institutional money resumes aggressive deployment. The picture is one of cautious optimism—investors anticipate meaningful growth in the crypto venture space, yet they remain mindful of the structural moderators that could cap exuberance or accelerate it based on how macro and regulatory conditions evolve.
Implications for founders, investors, and market structure
For founders, the forecast points to a potentially healthier fundraising environment in 2025, especially for ventures operating in stablecoin ecosystems, RWA tokenization platforms, AI-enabled infrastructure, and crypto infrastructure services. Investors may increasingly favor companies with clear unit economics, strong governance, and scalable products that align with regulatory expectations. The evolving market structure could see more sophisticated due diligence processes, longer investment horizons, and a greater emphasis on risk-adjusted returns. As the ecosystem matures, the interplay between traditional PE/VC funds and crypto-native fund managers could lead to more collaboration, co-investment opportunities, and a diversification of capital sources. The anticipated environment also underscores the importance of talent development, security, compliance, and product-market fit for startups seeking to capitalize on a more favorable macro- and regulatory backdrop.
Market outlook and strategic considerations
Investors and industry participants should approach 2025 with a dual lens: capitalize on the structural growth in real-world asset tokenization, stablecoins, and AI-enabled infrastructure, while maintaining resilience to macro shocks and policy reversals. Strategic priorities may include building cross-border capabilities, improving liquidity provisioning, and delivering regulated, user-friendly experiences that appeal to both retail and institutional users. Startups that can demonstrate auditable performance, transparent governance, and robust security will likely stand out in a competitive funding landscape. The overarching message is that the crypto venture ecosystem is positioned for continued expansion in 2025, but the pace and breadth of that growth will be shaped by how gracefully the sector navigates macro volatility, regulatory clarity, and the ongoing maturation of real-world asset markets.
Industry outlook and reader-facing takeaway
For industry stakeholders, the 2025 VC outlook signals opportunity across multiple domains: stablecoins as credible, scalable stores of value and payment rails; RWA tokenization unlocking broad asset liquidity; and AI-enabled infrastructure enhancing efficiency and user experience. Market participants should monitor regulatory developments, macro policy shifts, and adoption rates in emerging markets, as these factors will influence capital allocation, product strategy, and competitive dynamics. With crypto funding potentially higher than 2024 levels but not surpassing the 2021–2022 peaks, the environment favors disciplined growth, strategic partnerships, and pragmatic execution that demonstrates concrete traction and sustainability.
Conclusion
Deng Chao’s insights present a cohesive view: 2025 could be a pivotal year for crypto venture funding, driven by a favorable macro backdrop, regulatory clarity, and a suite of compelling use cases. Stablecoins emerge as a central driver for adoption and inclusion in emerging markets, complemented by the transformative potential of real-world asset tokenization in a market projected to reach trillions in value by 2030. While the optimism is tempered by macro risks and potential volatility, the trend toward AI-enabled infrastructure and robust crypto ecosystems suggests meaningful opportunities for investors and founders alike. The projected growth in venture capital activity—anchored by 2024’s gains and supported by forecasts for 2025—signals a continuing maturation of the crypto economy, with a sharper focus on governance, compliance, and scalable business models. As the ecosystem evolves, stakeholders can anticipate a more interconnected landscape where traditional finance and crypto-native platforms collaborate to unlock greater liquidity, inclusion, and innovation across global markets.
