Author: Zen, PANews
As the New Year's bell is about to ring, the crypto industry has ushered in a new development node. In the past 2024, the market has experienced recovery, innovation and adjustment. The leading projects have continued to consolidate their positions, and emerging tracks have quietly emerged, laying the foundation for the future. In the ups and downs of this year, VC, as a weather vane for the development of the industry, has not only witnessed the changes in the market, but also shaped the direction of the industry at the intersection of capital, community and technology.
Standing at the starting point of 2025, PANews invited more than a dozen top VCs to share their observations and thoughts on the crypto industry. They reviewed the highlights of the past year, analyzed the opportunities and challenges of the current market, and made predictions on future development trends. In this rapidly changing field, which projects and tracks are becoming the focus of VCs? Let us walk into the perspective of VCs and explore the "yesterday, today and tomorrow" of the crypto industry.
The most impressive projects in 2024
In the past year, the crypto industry has ushered in a new wave of growth driven by the dual drive of market recovery and technological innovation. From infrastructure upgrades to breakthroughs in emerging tracks, countless projects have emerged this year, showing strong vitality and innovation potential. Some of these projects have not only attracted a lot of attention with their unique technical paths or business models, but also left a deep mark inside and outside the industry.
James Wo, founder and CEO of DFG (Digital Finance Group), pointed out that Hyperliquid started out as a high-performance perpetual contract decentralized exchange (perp DEX), attracting a large number of users while maintaining transaction execution speed and liquidity. In addition, the tokens launched by Hyperliquid have no VC or listing on centralized exchanges (CEX), becoming one of the most successful airdrops in crypto history. "The platform is expanding its products and launching its own HyperEVM ecosystem, which includes many native decentralized applications (dApps) to increase the practicality of its spot ecosystem. The platform earns a lot of fees through on-chain clearing and market making, gradually eroding the market share of the top DEX and CEX."
Web3Port co-founder Chris also spoke highly of Hyperliquid and was impressed by its market share, community airdrop and distribution mechanism, and wealth effect. In addition, he also mentioned Pump.fun, the most successful Meme coin launch platform this year. Compared with existing platforms on the market, Pump.fun successfully pushed the concept of "Meme launch platform" to the top narrative and ignited the craze in the Meme market. Chris said that the revelation of Pump.fun is that Web3 projects can succeed by building products that are truly practical, have high user experience, and have market fit.
Ryan Rodenbaugh, CEO and co-founder of Wallfacer Labs (vaults.fyi), said that the revival of mature lending protocols such as AAVE and Compound in the DeFi field, as well as the emergence of high-quality new entrants such as Morpho, Euler, and Ajna, are exciting. Although DeFi has not received the same attention as in the past in the current cycle, the low-key success of these protocols is still worth paying attention to and tracking.
Among the answers given by a number of VCs, Pudgy Penguin is one of the most frequently mentioned projects. Joanna, founder and CEO of Jsquare, highly praised Pudgy Penguin, believing that it has driven the revival of the entire NFT track on its own. "As a first-round investor and Pudgy NFT holder, I fully felt the powerful energy of Luca's Web2+Web3 fusion thinking as a representative of the new generation of entrepreneurs, which also made me firm in one of the first principles: Invest in next generation."
"Ethena has performed well in the DeFi field with its USDE stablecoin, profiting from high funding rates by establishing 1x long and 1x short positions on centralized exchanges (CEXs). "Jsquare partner Dinghan said that Ethena's cooperation with BlackRock BUIDL Fund ensures that USDE can maintain stable returns even when the funding rate is negative, further consolidating its long-term feasibility.
How will the Bitcoin market develop?
Bitcoin has shown amazing growth momentum in 2024. According to Coingecko data, as of December 31, 2024, the price of Bitcoin has risen by 119.1%. This increase is mainly due to the institutional adoption of spot ETFs, the halving event in April, and the market optimism after the US election. Looking ahead to 2025, Chris, co-founder of Web3Port, believes that the Bitcoin bull market is expected to continue, and it is highly likely that it will break through $200,000 next year. He said that as the market matures, the supply and demand relationship of Bitcoin will be further strengthened, and Bitcoin below $50,000 may become history in the future bull and bear cycles.
Allen, a research analyst at Ryze Labs, holds a similar view on the upper limit that Bitcoin can reach next year. He mainly uses technical indicators Pi Cycle and 2Y MA Multiplier to judge the top. He said that historically, the two indicators resonated on December 5, 2013, December 16, 2017, and the most recent Pi Cycle top signal on April 12, 2021. According to historical data, these indicators have a high reference value. Allen pointed out that according to the 2Y MA Multiplier estimate, the top of Bitcoin may be around $200,000. Both signals have ready-made indicators on TradingView, and reminders can be set for easy top judgment and position reduction decisions.
"If we take a cautious perspective, I think the next stage peak of Bitcoin may reach a peak of $120,000 to $150,000, and then fluctuate between $100,000 and $150,000." Evan Lu, investment manager of Waterdrip Capital, said that based on Trump's remarks on the policy of establishing a strategic reserve of Bitcoin, assuming that the market value of gold remains unchanged, as long as the market value of Bitcoin fails to surpass the market value of gold, Bitcoin can be regarded as a growth asset and its price may reach $600,000 per coin, but this process may take 5 to 10 years.
Evan said that in the last halving cycle (May 2020), Bitcoin experienced a slow rise and reached its first high in April 2021, rising from about $9,000 to $65,000. From April to July, due to the impact of the "519 incident", the price of Bitcoin experienced a significant correction. However, the market then ushered in a second wave of increases, eventually reaching the highest point of the previous cycle. If the price on the halving day of this round is used as a benchmark, this may mark the beginning of a new round of increases. It is expected that between the end of 2024 and the first quarter of 2025, Bitcoin may experience a slight decline or sideways consolidation, and then enter a second wave of increases, when the price may reach $120,000 to $150,000.
"Unlike in the past, this round of market dynamics will be profoundly affected by multiple factors, the most critical of which include the external liquidity brought by the Bitcoin spot ETF and the continued capital inflow driven by future Bitcoin reserve policies." Evan believes that this means that from now to next year's high, the Bitcoin market may not experience a sharp correction, but will maintain a volatile upward trend and gradually move towards a higher price level.
On the topic of Bitcoin, Web3.com Ventures Investment Director Nemo quoted MicroStrategy co-founder Michael Saylor: "Spend 1,000 hours researching and you will become a Bitcoin maximalist. You will realize that this is not only a technology, but also a moral justice. Bitcoin has brought freedom, economic and property rights to 8 billion people, and also provided 4 million companies around the world with the opportunity to invest their funds in non-toxic assets."
Will the dispute between Meme and “VC Coin” continue? What is the best solution to the dilemma?
The series of controversies about "VC coins" have been an important topic that cannot be avoided in the past year. Will Wang, partner of Generative Ventures, proposed a novel perspective and viewpoint on this. He said that once the scale of VC funds in the primary market exceeds 30-50 million US dollars, it will be difficult to bring excess returns to LPs. Will Wang believes that only when the scale is sophisticated enough can VCs be forced to go deep into the early stages and truly support entrepreneurs who are in urgent need of help, thus giving birth to a real "myth". Looking back at those large-scale VC funds, they often fall into the rut of expanding management scale, participate in later rounds, and launch "VC coins" criticized by the market. This practice is actually an old problem of Web2 VC, and Web3 VC has not been immune in the past few years.
“I believe this situation will gradually be corrected. Whether it is technological or financial innovation, there will always be a stage of non-consensus, and this is when VCs should take action. The market will eventually reward those VCs that dare to act during non-consensus periods,” added Will Wang.
What is the essence of the dispute between Meme and VC coins? Chris, co-founder of Web3Port, pointed out that it all comes down to the competition between existing funds and liquidity in the market. In an environment with limited new funds, VC coins have low circulation, high FDV, and the continuous emergence of VC coin projects, making it difficult for market funds to continue to support them, and retail investors' willingness to take over has been greatly reduced. The advantage of Meme coins lies in their full circulation and fair distribution mechanism, which fits the psychology of market investors and has become a "new weapon" for retail investors to fight back against institutional advantages.
However, the PVP (player competition) attribute of Meme coins is essentially unsustainable, because except for a few top Meme projects, most Meme coins are difficult to have long-term value support. Chris said that from the overall pattern of the crypto market, except for BTC and ETH, and a very small number of DeFi infrastructure projects with stable income sources, the tokens of most other projects are PVP, and market participants compete with each other, and win and lose from the same source. As for the current predicament of VC coins, he believes that there is no good solution in the short term. Against the background of tight market liquidity and increasing institutional investment advantages, the alleviation of VC coin problems requires a complete bull-bear cycle to allow the market to clear naturally and rebuild trust and fairness.
"Issuing coins is not the end, but the starting point of the real operation of the project." Evan Lu, investment manager of Waterdrip Capital, believes that project owners cannot do projects with the idea of "financing means profit, and issuing coins means delivery". Instead, they need to seriously consider whether they can really have application scenarios, whether they can have more stable cash flow income, and whether the project can still maintain active users and real communities after issuing coins.
IOSG Ventures investment principal Jiawei admitted that the "VC coin project" needs to think better about Token Market Fit, whether it is necessary to launch the token, what is the purpose, what kind of token the community will pay for, so as to allow a wider community to participate, disperse the chips and strengthen the interest binding.
Which ecosystems, tracks, and projects may have outstanding performances and become the rising stars of the industry?
As the crypto market rises, a new round of innovative narratives such as AI and DeSci are driving the industry towards a new stage of development. After experiencing the baptism of market cycles, the leading ecosystem continues to consolidate its moat, while emerging tracks and projects are also quietly rising, accumulating strength for future outbreaks. Looking ahead to the coming year, which ecosystems, tracks and projects are expected to stand out and become the "rising stars" leading the industry? Many institutions have given unique insights.
Will Wang, partner of Generative Ventures, believes that many people do not understand the essence of RWA (Real World Asset). "We believe that RWA is essentially one thing: let blockchain record the accounts of mainstream financial assets around the world." He said that at present, the penetration rate of this "on-chain accounting" is less than 0.1%. Even if the penetration rate is only increased by one order of magnitude, it may give rise to multiple secondary assets like ONDO and USUAL.
IOSG Ventures investment principal Jiawei said that re-staking, as the big narrative in 2024, has not yet been reflected in the coin price. With the gradual launch of AVS, it may reach a climax in 2025. In addition, ZK series projects (RiscZero, hardware acceleration Ingonyama, etc.) will also gradually show their market potential.
"AI Agent is expected to become the rising star of the crypto industry." Allen, a research analyst at Ryze Labs, said that AI Agent has the ability to process massive amounts of market data and will be able to make accurate trading decisions in real time in the future. Its reaction speed far exceeds that of traditional human traders. In the DeFi field, AI Agent can optimize lending rates and the pricing mechanism of liquidity pools, thereby significantly improving the efficiency of fund utilization. In addition, it also opens up new possibilities for the intelligent management of crypto assets and redefines the boundaries of asset management.
In this topic, the PayFi track has been mentioned repeatedly by many institutions, and it is undoubtedly the focus of market attention. With the popularity of cryptocurrencies, the ecosystem that can achieve seamless and low-cost payments is ushering in a period of rapid development. Jsquare partner Dinghan predicts that projects that connect traditional finance with cryptocurrencies (such as Layer 2 solutions and stablecoin issuers) will receive widespread attention in the future. Payment protocols that can be deeply integrated with mainstream services and easily realize the conversion of cryptocurrencies and fiat currencies will become a key force in promoting the integration of cryptocurrencies into daily life.
The integration of AI and blockchain is also seen as an important development direction for the future. Dinghan said that with the rapid rise of decentralized AI infrastructure and AI agents, this field is ushering in a new growth cycle. Projects to build decentralized AI networks or AI-driven applications are gaining momentum and are expected to become a new highlight of the industry. "Blockchain provides a trusted foundation layer for AI interactions and transactions, which not only improves the transparency and security of data, but also opens up new prospects for the widespread implementation of autonomous AI applications, further accelerating the pace of innovation in this field."
Will the old-fashioned “mass adoption” have a breakthrough? Who will hold the holy grail?
"We have seen some mass adoption in different areas of the industry." James Wo, founder and CEO of DFG (Digital Finance Group), said that vertical fields such as DePIN are attracting Web2 users and providing value to their ecosystem through additional resources. "For example, Helium connects existing Web2 telecom giants through 5G networks, and Render provides GPUs at low cost to help games, rendering and AI." James believes that the next area to promote larger-scale adoption may be the payment field. Infrastructure that can provide efficient crypto payment and fiat currency redemption solutions for physical stores will drive a new wave of users, and this trend will accelerate further as retail investors begin to invest and hold crypto assets.
Zeke, investment research manager at YBB Capital, believes that judging from the recent trends in industry discussions, the payment track is expected to become the first track for blockchain "Mass Adoption". Stablecoins have demonstrated their strength in non-US dollar countries that exceeds the efficiency of traditional banking finance, and for residents of third world countries, they also have multiple utilities such as anti-inflation of local currencies, virtual service subscriptions, and financial investment. Once the compliance framework is established, the potential of this track is equivalent to the traditional payment system of Web2 at the trillion level. The huge demand will also give rise to various start-up projects, from upstream stablecoin issuers to downstream payment services, which will be a real flourishing. The first era of large-scale application of blockchain is likely to start from here.
Joanna, founder and CEO of Jsquare, expressed optimism about the progress of "mass adoption" next year. She said that mass adoption, on the one hand, means bringing in money (institutional/retail investors), and on the other hand, bringing in users (mainly retail investors). Traditional institutions are more likely to enter the market driven by policy factors, while at the retail level, from the perspective of ecological positioning and track selection, Solana ecology has a leading advantage. At the same time, Joanna has high hopes for Pudgy Penguins in her investment portfolio, expecting it to achieve breakthroughs in the future, and believes that Luca can set a benchmark image for the new generation of entrepreneurs.
Ryan Rodenbaugh, CEO and co-founder of Wallfacer Labs (vaults.fyi), said that the breakthrough will be driven by a new front-end user experience that makes it easier for less experienced users to start using DeFi. In addition, products with existing distribution channels (such as wallets) will also be key to providing users with seamless interactions through embedded DeFi experiences.
Which stage of the bull market are we in and when will it last?
"We may be in the middle of the bull market. As for when it will end, we think we need to consider the significance of the approval of the Bitcoin ETF." Zeke, investment research manager at YBB Capital, said that ETFs allow Bitcoin to exist under a centralized regulatory framework, and transactions are legal and fully regulated, which also means that a wider range of financial derivatives will be born. As legal participants become more and more widespread, this will directly reduce market price volatility. Therefore, it will be difficult for us to see the possibility of a short-term halving or a sharp drop in the future. In addition, the weakening of the cyclical impact of Bitcoin halving will transform the market from the previous rapid bear and rapid bull to a long-term slow bull.
James Wo, founder and CEO of DFG (Digital Finance Group), also expressed his long-term outlook for the market. He said that we may be in the "optimistic phase" of the market cycle, as people who do not believe in cryptocurrencies are starting to buy and hold some crypto assets, while more and more institutions and governments are expressing interest in the crypto industry. The Trump administration's return to power will also promote a more friendly crypto regulatory environment, and the proposal for a strategic reserve of Bitcoin will undoubtedly further increase the market's interest and confidence in Bitcoin and the entire crypto industry.
"It's somewhat counterintuitive to predict when a market cycle will end." James added that if we expect a market crash like the one in 2022, it's unlikely to happen because the crypto environment has improved and developed. Many institutions have begun to follow Microstrategy's example and accumulate Bitcoin in large quantities, so it's unlikely to see the market cycle "end" and see an 80% plunge. There may be adjustments in the future, but it's unlikely to return to the level of the bear market.
Nemo, investment director of Web3.com Ventures, believes that in the short term, Bitcoin has at least completed half of the bull market process. He said that from the perspective of optimism and faith, Bitcoin will not disappoint anyone. The essence of Bitcoin is to fight inflation and protect wealth.
How should retail investors seize opportunities in the bull market?
Chris, co-founder of Web3Port, suggested that retail investors should focus on high-certainty tracks, especially BTC, Meme coins and AI narrative tracks, and be cautious about investing in old altcoins that lack new narrative support. In addition, we must learn to follow the trend, understand market trends, and keep up with hot spots and attention points. "The cycle is the core of the market. When the cycle comes, we should make timely arrangements and exit in time before the cycle subsides."
Allen, a research analyst at Ryze Labs, said that the bull market is the main reason why most people lose money. "Investors may have made unexpected profits in the early stage, but they began to use borrowed funds and leverage in the mid-term. In the end, in a rapid correction, all floating profits turned into floating losses, and they were even forced to cut their losses and leave the market." Allen believes that in order to avoid this situation, the best strategy is to prepare a sum of money that will not affect your current life even if you lose it completely, and withdraw the cost at the appropriate time to ensure that the funds retained in the market are all profits. The most taboo practice is to continuously add principal and continue to invest, and then use leverage when the principal is insufficient. This operation seems to be able to quickly expand profits, but in fact it is extremely risky. Once the market fluctuates violently, the consequences are often disastrous.
Zeke, investment research manager of YBB Capital, also pointed out the potential risks of the bull market: "Market changes in 25 years will be more complex than in previous periods. The overall investment strategy needs to be more stable than 24 years ago. The more the market rises, the more dangerous it is. None of us can accurately judge the market trend. In 25 years, we should be more awed by market changes." Zeke said that investment trading is a practice, and the crypto market is constantly developing towards a more mature and professional trend. Investors should first cultivate themselves internally and then learn externally. It is particularly important to maintain a stable and strong core and always put risk first.
Jsquare partner Dinghan suggested that retail investors should prioritize risk management. "While cryptocurrencies have significant return potential, their volatility remains a key issue." He added that blue-chip assets such as Bitcoin and Ethereum are generally safer choices for those seeking passive investments. For more active investors, security is essential-use hardware wallets and trusted security tools. Focus on high-quality, sustainable projects rather than chasing short-term trends. In any market, it is crucial to identify assets that outperform in the long term rather than holding assets that lag behind the market.
Recommended reading: "2024 "Training Guide" for Senior Traders: How to Capture Opportunities from Volatility and Keep Profits"
