Crypto funding rebounds: $18 Billion venture capital expected in 2025
In 2024, venture capital investment amounted to $11-$12B
The approval of Bitcoin ETFs in early 2024 brought venture capital back to the crypto space
The upcoming year, 2025, is expected to be even more successful, although it will still lag behind the investment levels of 2021-2022.
In a recent interview with Crypto World on CNBC, Robert Le, senior analyst at PitchBook, shared insights into the outgoing year and the outlook for the next reporting period. According to him, venture capital investment in the crypto space in 2024 is estimated to reach $11-$12 billion, marking a 10%-20% increase over 2023 but falling short of expectations.
The decline in crypto project funding was primarily due to the collapse of major players and higher interest rates. However, as the year progressed, the momentum of cryptocurrency investments slowed.
"Bitcoin wavered a bit, and there wasn’t much activity, especially during the summer," the analyst stated. Still, 2025 is projected to be significantly more successful, with venture funding potentially reaching $18 billion or more.
Although this figure still falls short of the nearly $30 billion invested in 2021 and 2022, it signals a clear resurgence of interest and investment.
Institutional investors and regulatory collaboration to boost investment inflows
Investor prospects will improve with lower interest rates. Additionally, universal investors such as major financial institutions have returned to the crypto sector. Their engagement with regulators is expected to play a key role in creating a more stable and reliable environment for cryptocurrencies. This growing trust will translate into increased capital inflows into the ecosystem.
When asked about the areas of focus for crypto venture funding in 2025, Le highlighted a potential shift from infrastructure and speculative sectors like NFTs and Web3 to real-world applications.
Le stressed the need for more user-friendly platforms that enable people to engage with cryptocurrencies without requiring a deep understanding of the underlying technology. He compared this to the early days of the internet, where foundational infrastructure like AWS was developed, but the real value emerged when companies like Uber and Airbnb built on top of it.
Bitcoin Layer 2 development gained attention in 2024
According to Le, one project that garnered significant attention in 2024 was the development of Bitcoin Layer 2 solutions, which could help scale Bitcoin and make it more applicable for everyday use.
However, progress has been slower than anticipated, with technical challenges hindering the development of scalable solutions. Whether Bitcoin Layer 2 will meet the necessary requirements remains unclear.
The year 2025 is poised to be transformative for the cryptocurrency world, with Bitcoin and Ethereum leading the charge. This outlook comes from the latest forecast by the analytics firm Galaxy Research.
