The crypto and blockchain sector demonstrated remarkable resilience in 2024, with venture capital funding reaching $13.6 billion, marking a substantial recovery from $10.1 billion in 2023, according to a comprehensive DeFi Report. While this represents a positive trajectory, the industry continues to operate below its historic peak of $32.4 billion achieved during the crypto bull run of 2021.
Industry analysts from Galaxy Research and PitchBook project an even more robust funding environment for 2025, with expectations of surpassing $18 billion in venture capital investments. This optimistic outlook is underpinned by several macroeconomic factors, including declining interest rates, enhanced regulatory clarity, and a notable resurgence of interest from generalist investors who had previously stepped back from the crypto sector.
The year 2024 witnessed several significant funding rounds that highlighted continued institutional confidence in blockchain technology. Monad Labs emerged as a standout recipient, securing an impressive $225 million for its layer-1 smart contract network development. In a similar vein, Berachain demonstrated the market's appetite for innovative infrastructure solutions by raising $100 million for its modular blockchain platform.
Institutional involvement reached new heights as traditional financial giants made strategic moves into the crypto space. BlackRock's $47 million investment in tokenization platform Securitize signaled growing mainstream acceptance of digital asset infrastructure. The Bitcoin ecosystem also saw substantial development, with staking protocol Babylon attracting $70 million in funding.
The stablecoin sector showed particular promise, as evidenced by French startup Usual's successful $10 million raise from industry leaders Binance Labs and Kraken Ventures. The company's flagship product, Usual USD, backed by real-world assets, demonstrated remarkable traction, accumulating over $1.7 billion in total value locked (TVL) by year's end.
Generalist Investors To Usher-In the $18B VC Funding in 2025
Robert Le, a leading analyst at PitchBook, offers an optimistic perspective on the sector's future. "We're going to see $18 billion or more in venture capital dollars invested into crypto," Le stated in a CNBC interview, highlighting the convergence of multiple positive factors. He particularly emphasized the crucial role of generalist investors returning to the space and the substantial dry powder held by crypto-native funds.
The regulatory landscape remains a critical factor in shaping investment sentiment. Le anticipates a more favorable regulatory environment under the incoming U.S. administration, with potential progress on stablecoin legislation and crypto-specific regulatory frameworks. Even without new regulations, the stability of the current regulatory environment could provide sufficient confidence for increased investment activity.
Galaxy Research analysts Alex Thorn and Gabe Parker provide additional context, noting that "crypto VC fundraising has historically lagged broader crypto market trends." They suggest 2025 could represent a significant "catch-up" period, potentially catalyzing a new wave of innovation and growth in the sector.
The evolution of investment focus is particularly noteworthy, with funding expected to shift from infrastructure projects toward decentralized applications (DApps) and real-world use cases. This strategic pivot mirrors the development trajectory of traditional tech infrastructure, with Le drawing parallels to Amazon Web Services' role in enabling innovative consumer applications.
Recent funding rounds reflect this trend, with companies like Avalon Labs securing $10 million to scale its Bitcoin-backed DeFi ecosystem, serving over 200,000 users and supporting more than 20,000 Bitcoin. Similarly, Accountable's $2.3 million raise for privacy-focused data-sharing technology demonstrates growing interest in practical applications of blockchain technology.
The combination of institutional involvement, renewed interest from generalist investors, and the strategic shift toward application-focused investments positions the crypto sector for potentially significant growth in 2025. With projected funding of $18 billion, the industry appears poised for a transformative year that could establish new benchmarks for blockchain innovation and adoption.