VC prediction: Wall Street marries encryption, digital asset investments may reach a new high of 25 billion dollars in 2025.

According to Gate news, the global venture capital community is embracing the digital asset space with unprecedented optimism. Several top venture capital partners revealed to the media that, driven by the accelerated influx of capital from Wall Street, the total investment in digital asset startups is expected to soar to between $20 billion and $25 billion by 2025.

"We expect to ultimately fall within the range of $20 billion to $25 billion," Mike Giampapa, General Partner at Galaxy Ventures, stated confidently. This prediction is strongly supported by industry data — according to DefiLlama statistics, the funding in this sector has exceeded $9.6 billion so far in 2025.

Research firm PitchBook's forecast looks further ahead, estimating that industry financing will rise to $18 billion by 2025, achieving a doubling in growth. This bullish wave signifies that the cryptocurrency sector is entering a critical transformation turning point.

Policy Tailwind: From Cold Winter to Warm Spring The reversal of industry confidence is not a coincidence. After enduring a strict regulatory "winter" during the Biden administration, the cryptocurrency sector has been forced to undergo a profound "transformation." Digital assets, once marginalized by traditional finance, are now increasingly being accepted by Wall Street as a legitimate and important component of finance.

The key turning point lies in the change of leadership in the United States and the shift in policy direction:

• The Trump administration sends strong pro-crypto signals and promotes industry-friendly legislation.
• Regulatory environment significantly improved: With the intense enforcement actions led by former SEC Chairman Gary Gensler coming to an end after Trump's election, entrepreneurs have been able to "unshackle" themselves and explore crypto opportunities more freely. Wyatt Lonergan of VanEck Ventures candidly stated, "Those constraints have disappeared."

Market Resonance: Bullish Signals Explode Across the Board The favorable policies quickly transmitted to the market, igniting a comprehensive bullish sentiment:

1. Price Surge: Bitcoin and major altcoins have all broken their historical highs.
2. IPO Boom: Stablecoin giant Circle successfully went public, with its valuation levels chasing the peak of the internet bubble in the 1990s.
3. Traditional financial giants deeply involved: Banks are actively exploring the issuance of their own stablecoins, and fintech companies are frequently acquiring digital assets.
4. Boundary Dissolution: The barriers between cryptocurrencies and traditional finance (TradFi) are accelerating their collapse, merging into the main theme.

VC Investment Logic Has Changed Dramatically: Fundamentals Reign Supreme With the increasing integration of the crypto world and traditional finance, the assessment criteria and investment strategies of venture capital institutions have undergone fundamental changes. Investors are no longer solely obsessed with conceptual speculation, but are returning to the essence of business.

"The consensus for 2025 is: fundamentals are crucial - it must be a truly promising and sustainable business." Jonas Kristensen, head of Wintermute Ventures, pointed out incisively.

VCs are now more focused on the hard metrics of startups:

• Clear revenue model
• Effective user acquisition and distribution channels
• Real Active User Base
• Verifiable Business Feasibility

Emerging Founders Rise: Breaking the Barriers of "Crypto Native" Accompanying this wave of investment enthusiasm is a group of new founders with diverse backgrounds. Ronan Gunther of VanEck Ventures noted that, unlike past cycles:

• The founding team is no longer limited to pure "crypto-native" geeks.
• Elites from traditional finance (such as former bankers) and cutting-edge technology fields (such as AI giants like OpenAI) are entering in large numbers.
• Their core mission is to: integrate blockchain technology deeply into traditional finance and other real economy sectors.

"They are closely linking the tech world and the crypto world — crypto is no longer an island." emphasized Lonergan. Founding teams that can successfully demonstrate this fusion ability will hold a significant advantage in the fierce fundraising competition.

The track direction most关注ed by VC In addition to integrating traditional finance, venture capital is also focused on:

1. Cross-Innovation of Cryptocurrency and Artificial Intelligence (AI)
2. Significantly Enhanced User Experience (UX)
3. Next-Generation Innovative Crypto Trading Platform

Aftermath of FTX: Growing Pains and Purification While the industry is advancing rapidly, it also deeply remembers the lessons from major scandals like FTX. Christensen from Wintermute believes that the collapse of FTX is, to some extent, a "blessing in disguise":

• Purification Industry: A large number of bad actors have been eliminated.
• Forced Compliance Upgrade: Compelling the entire industry to significantly enhance governance, transparency, and compliance standards.

However, the cost is heavy:

• Large Capital Withdrawal: Some large institutional investors affected by the scandal are turning to "safer" areas like AI in search of high returns, with a low likelihood of returning to crypto in the short term (according to Galaxy's Jim Pappas).
• LP (Limited Partners) are cautious: Limited partners providing "ammunition" for venture capital funds are currently taking a wait-and-see approach towards the digital asset category. VCs expect that as the industry matures and opportunities emerge, LP capital will eventually flow back. Zhan Papa pointed out: "LPs are savvy. Where there are real good opportunities, capital will naturally gather. We are currently in a digestion period before the capital flows back."
• Transparency Becomes a Hard Requirement: Investors are now placing extreme importance on the transparency of the founding team, demanding clear disclosure of holdings and trading situations just like traditional startups. Longan warned: "History has proven that if there are loopholes in the system that can be exploited to harm others, there will definitely be someone taking advantage of it."

Outlook: The Future is Bright, Rational Return Although it is expected that the investment amount will be difficult to return to the historical peak of $36 billion in 2021 in the short term (affected by the temporary departure of large capital and the prudence of LPs), the industry's consensus strongly points to a healthier, more mature growth phase driven by real demand and fundamentals. Wall Street's deep embrace, marginal improvements in the regulatory environment, the influx of cross-industry talent, and a return to investment logic based on business fundamentals collectively lay a solid foundation for the next round of prosperity in the digital asset industry. Cryptocurrencies are steadily moving from the fringes of the financial world to center stage.

(Source: DL News)