As 2025 approaches, exploring insights into how encryption VC will interpret the market and potential opportunities.

As the New Year bell is about to ring, the encryption industry welcomes a new development node. In 2024, the market has experienced recovery, innovation, and adjustment, with leading projects continuously consolidating their positions and emerging tracks quietly rising. As an industry barometer, VC not only witnesses market changes but also shapes the direction of the industry at the intersection of capital, community, and technology.

Standing at the starting point of 2025, we invited several top VCs to share their observations and thoughts on the encryption industry. They reviewed the highlights of the past year, analyzed current market opportunities and challenges, and made predictions about future development trends. In this ever-changing field, which projects and tracks are becoming the focus of VCs? Let's explore the "yesterday, today, and tomorrow" of the encryption industry together.

The Most Impressive Projects of 2024

In the past year, the encryption industry has welcomed a new wave of growth driven by both market recovery and technological innovation. From infrastructure upgrades to breakthroughs in emerging sectors, countless projects have emerged, showcasing strong vitality and innovative potential. Some of these projects, through unique technological paths or business models, have not only attracted significant attention but have also left a profound mark both within and outside the industry.

James Wo, the founder and CEO of DFG, pointed out that Hyperliquid, as a high-performance perpetual contract DEX, attracts a large number of users while maintaining trading execution speed and liquidity. Its token launch has become one of the most successful airdrops in cryptocurrency history. The platform is expanding its products and launching the HyperEVM ecosystem to increase the utility of the spot ecosystem. By earning substantial fees through on-chain settlement and market-making, it gradually eats into the market share of top DEXs and CEXs.

Chris, co-founder of Web3Port, also highly praised Hyperliquid's market share, community airdrop and distribution mechanisms, and wealth effect. He also mentioned that Pump.fun successfully brought the concept of "Meme Launch Platform" to the top narrative, igniting the Meme market craze. Chris stated that Pump.fun inspires Web3 projects to achieve success by building practical, high-experience, and market-compatible products.

Wallfacer Labs CEO Ryan Rodenbaugh stated that the revival of mature lending protocols in the DeFi space such as AAVE and Compound, along with high-quality newcomers like Morpho, Euler, and Ajna, is exciting. Although the current cycle of DeFi does not attract as much attention as before, the understated success of these protocols is still worth monitoring.

Pudgy Penguin is a project mentioned by multiple VCs. Joanna, the founder of Jsquare, believes it has revitalized the entire NFT sector. As an early investor and NFT holder, she feels the powerful energy of Luca as a representative of the new generation of entrepreneurs, bursting with the integrated thinking of Web2 + Web3, which solidifies the first principle of "Invest in next generation."

Jsquare partner Dinghan pointed out that Ethena has performed remarkably in the DeFi sector with the USDE stablecoin, profiting by establishing long and short positions through CEX. Collaborating with the BlackRock BUIDL fund to ensure the long-term viability of USDE.

Bitcoin Market Trend Prediction

Bitcoin is showing an astonishing growth momentum in 2024, with a cumulative increase of 119.1% by the end of the year. Chris, co-founder of Web3Port, believes that the Bitcoin bull market is likely to continue in 2025, with a high probability of breaking through $200,000. As the market matures, the supply and demand relationship of Bitcoin is strengthening, and prices below $50,000 may become a thing of the past.

Ryze Labs analyst Allen determines the top using the Pi Cycle and 2Y MA Multiplier, expecting the Bitcoin top to be around $200,000. These indicators can be set up with alerts on TradingView for top determination and reduction decision-making.

Evan Lu, the investment manager at Waterdrip Capital, predicts that Bitcoin's next peak will be between $120,000 and $150,000, followed by fluctuations between $100,000 and $150,000. Based on policy expectations, assuming the market value of gold remains unchanged, Bitcoin's market value has not exceeded that of gold, and the price could reach $600,000, but it would take 5 to 10 years.

Evan believes that the current market dynamics are influenced by multiple factors, especially the external liquidity brought by spot ETFs and the capital inflows driven by future reserve policies. From now until the peak next year, the Bitcoin market may maintain a fluctuating upward trend, gradually moving towards higher price levels.

The Dispute Between Meme and "VC Coin"

Will Wang, a partner at Generative Ventures, believes that large-scale VC funds struggle to provide LPs with excess returns, while smaller funds are more capable of supporting early-stage entrepreneurs. Large funds participating in later rounds and launching "VC coins" are merely recurring issues in Web2 VC. He believes that this situation will gradually correct itself, and the market will eventually reward VCs who dare to act during non-consensus periods.

Chris, co-founder of Web3Port, pointed out that the competition between Meme and VC coins is essentially a competition for market liquidity and existing funds. The full circulation and fair distribution of Meme coins align with the psychology of retail investors, but the PVP attributes are not sustainable. There is no good short-term solution for the VC coin dilemma, and it needs to undergo a complete bull-bear cycle to rebuild trust and fairness.

Evan Lu, the investment manager at Waterdrip Capital, emphasized that project teams need to consider the implementation of application scenarios, stable cash flow, and an active community. Jiawei from IOSG Ventures suggested that "VC coins projects" should better think about Token Market Fit, and decentralize chips to strengthen interest binding.

Potential Tracks and Projects

Will Wang, a partner at Generative Ventures, is optimistic about RWA, believing that its essence is blockchain accounting for mainstream global financial assets. Currently, the penetration rate is less than 0.1%, indicating significant room for growth.

IOSG Ventures Jiawei predicts that re-staking will be a major narrative in 2024, with a potential peak in 2025. ZK-based projects will also gradually demonstrate market potential.

Ryze Labs analyst Allen is optimistic about AI Agents, believing they can optimize DeFi pricing mechanisms, enhance capital efficiency, and redefine the boundaries of asset management.

The PayFi track has attracted the attention of several institutions. Jsquare partner Dinghan predicts that projects bridging traditional finance and encryption will receive widespread attention. The integration of AI and blockchain is also seen as an important development direction.

"Mass Adoption" Breakthrough

DFG founder James Wo believes that vertical fields such as DePIN are attracting Web2 users. The payment sector could drive the next wave of users. YBB Capital's Zeke believes that the payment track is likely to become the first track for blockchain "Mass Adoption".

Jsquare CEO Joanna is optimistic about the "mass adoption" process next year. From the perspective of ecological positioning and track selection, the Solana ecosystem has a stronger leading advantage. She has high hopes for Pudgy Penguins in her investment portfolio.

Wallfacer Labs CEO Ryan Rodenbaugh believes that the new front-end user experience and embedded DeFi experience will drive breakthroughs.

Bull Market Stage Determination

YBB Capital Zeke believes that we are currently in the mid-stage of a bull market. The approval of Bitcoin ETFs means broader financialized derivatives, which may reduce market price volatility and shift towards a long-term slow bull.

DFG founder James Wo believes we are currently in an "optimistic phase". The accumulation of Bitcoin by institutions has reduced the likelihood of an 80% crash, and while there may be adjustments in the future, it is unlikely to return to bear market levels.

Web3.com Ventures Nemo believes that the short-term Bitcoin bull market has completed half of its process. Bitcoin is essentially a hedge against inflation, safeguarding wealth.

Retail Investor Recommendations

Web3Port Chris suggests focusing on high certainty tracks, paying attention to BTC, Meme coins, and AI narratives, and investing cautiously in old altcoins. Understand market trends and grasp the cycles.

Ryze Labs Allen reminds that making money is actually easier to lose in a bull market. It is advised to prepare funds that can withstand losses, withdraw costs in a timely manner, and avoid adding principal and using leverage.

YBB Capital Zeke emphasizes that the market has become more complex over the last 25 years, requiring more robust strategies. Investment trading is a practice; one should first cultivate internally before learning externally, always prioritizing risk.

Jsquare Dinghan recommends prioritizing risk management. For passive investors, blue-chip assets are safer. Active investors should focus on safety and pay attention to high-quality sustainable projects rather than short-term trends.