2025 Crypto VC Funding Expected to Reach $18 Billion, Says PitchBook Analyst

Crypto venture capital (VC) funding is set to experience a significant boost in 2025, according to PitchBook analyst Robert Le. In a recent interview, Le predicted that crypto VC funding will reach $18 billion or more in 2025, a 50% increase compared to 2024.

2023 and 2024 Recap

Le described 2023 as a challenging year for crypto funding due to the collapse of FTX, erosion of trust, and higher interest rates. However, 2024 started strong with positive momentum driven by the approval of spot Bitcoin exchange-traded funds (ETFs). Despite a mid-year slowdown, Le expects 2024 to end with $11-12 billion in invested capital, a 10-20% increase from 2023.

2025 Funding Expectations

Several factors contribute to Le’s optimistic projection for 2025 crypto VC funding. These include:

  • Generalist investors regaining interest, signaling potential large-scale investments.
  • Crypto-native funds holding significant dry powder, but requiring generalist participation for substantial growth.
  • Financial institutions playing a pivotal role by leveraging their trusted relationships with regulators.

Shifting Focus

Le anticipates a shift in focus toward application-layer investments, moving beyond infrastructure projects. Examples of this shift include:

  • Decentralized applications (dApps) targeting non-crypto users with better risk management.
  • Use cases leveraging crypto infrastructure for non-crypto sectors such as mobility and energy data.

Le draws an analogy to Amazon Web Services (AWS) serving as a base for companies like Uber and Airbnb, highlighting the need for robust applications atop crypto infrastructure to realize its full potential.

Regulatory Clarity

Le emphasizes the importance of regulatory clarity for the crypto industry’s growth. He expresses cautious optimism about the U.S. regulatory environment in 2025, noting:

  • A shift in SEC leadership under the incoming administration could result in fewer enforcement actions.
  • Legislative progress, such as stablecoin bills or crypto-specific rules, would be beneficial but is not guaranteed.
  • Even a lack of new regulatory actions could be an improvement over the past two years of uncertainty.

“Even if the next presidential administration and incoming lawmakers ‘do nothing,’ that is already an improvement.”

Le concludes that a stable regulatory environment, coupled with growing institutional involvement and application-focused investments, could set the stage for significant advancements in the crypto sector in 2025.

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