As we enter a new year, institutional asset managers are predicting that crypto projects will attract more capital from venture capitalists (VCs) in 2025. The CEO of HashKey Capital, Deng Chao, recently shared his insights with Cointelegraph on the growing interest in stablecoin products, real-world asset tokenization, artificial intelligence, and infrastructure.
Macro Tailwinds to Drive VC Investments
According to Chao, increased digital asset valuations in 2024 and the tailwinds from the re-election of Donald Trump in the United States will attract more VC capital to crypto projects. He emphasized that the supportive macro environment driven by stimulative US policies and the formalization of crypto regulatory frameworks will drive more VC investments heading into 2025.
"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."
— Deng Chao, CEO of HashKey Capital
Despite the optimistic outlook, Chao cautioned that macro risks, including geopolitical tensions or increased deficit spending, could increase price volatility and uncertainty in the new year.
Real-World Asset Tokenization and Emerging Markets
Chao added that stablecoins were the strongest proven use case for crypto in 2024, and VCs are increasingly focused on stablecoin usage in emerging market economies. Dollar-pegged stablecoins are real-world tokenized assets that are being used as a store of value by individuals in countries with rapidly depreciating local fiat currencies or strict capital controls.
The Growth of the Stablecoin Sector
The growth of the stablecoin sector can be attributed to several factors, including:
- Cheaper fees compared to traditional banking services
- Near-instant finality times for transactions
- No requirement for a bank account
These benefits make dollar-pegged stablecoins a viable method of providing banking services to the unbanked. According to the World Bank, an estimated 1.4 billion people lack access to adequate banking services.
Real-World Asset Tokenization Sector Projected to Reach $30 Trillion by 2030
The real-world asset tokenization sector is projected to reach up to $30 trillion by 2030. This sector includes government securities, stocks, corporate bonds, stablecoins, collectibles or any other asset tokenized on a blockchain ledger.
VC Investment Set to Increase in 2025 but Falls Short of 2021 Peak
Market analyst Infinity Hedge predicted that crypto VC investment in 2025 would surpass last year’s levels but wouldn’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.
Total RWA Value, Including Stablecoins
According to a recent report from Galaxy Digital, VC investments in crypto projects are projected to grow to $18 billion in 2025. A 50% year-over-year growth rate is expected in 2025, but it will fall short of the highs established in 2021-2022.
Conclusion
The increasing interest in stablecoin products and real-world asset tokenization is driving more VC investments into crypto projects. While there are risks associated with macroeconomic conditions, the supportive environment is expected to drive growth in the sector. As we enter a new year, it’s essential for investors and entrepreneurs to stay informed about the latest trends and developments in the crypto market.
Related Articles
- From RWA Boom to Bitcoin Yields: Top Crypto Trends to Watch in 2025
- The Secret of Pitching to Male VCs: Female Crypto Founders Blast Off
Subscribe to Our Newsletter
Stay up-to-date with the latest business trends in blockchain and crypto. Our weekly newsletter provides valuable insights to navigate the market and spot financial opportunities.
Subscribe now and gain access to:
- Exclusive interviews with industry leaders
- In-depth analysis of market trends and developments
- Insights into emerging technologies and innovations
About Us
Cointelegraph is a leading online publication providing news, analysis, and insights on the blockchain and crypto markets. Our team of experienced journalists and experts deliver high-quality content to help you stay informed about the latest developments in the sector.
Subscribe now and join our community of professionals and enthusiasts who are shaping the future of finance and technology.
